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End of Strike on the U.S. East Coast, Freight Rate Decline is an Inevitable Trend

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Posted by Realhong (Shanghai Head Office) International Logistics Co., Ltd On Oct 08 2024

(International Logistics & Freight)

On October 1st, dockworkers in the U.S. East Coast and Gulf of Mexico launched a large-scale strike, halting operations at 36 key ports and causing significant disruptions to both U.S. and global supply chains. The strike on the U.S. East Coast officially ended on October 4th. Although it lasted only three days, the deeper conflict over port automation, which underlies the strike, remains unresolved and has been postponed until January 15, 2025. This strike not only directly impacted current operations but also has far-reaching effects on future market dynamics.

Impact of the Strike

During the strike, a large number of ships were forced to anchor outside U.S. ports, with statistics showing that 63 vessels were affected. This directly led to delays in shipments and disrupted the capacity of originating ports. Given the congestion of ships and cargo, it is expected to take 2-3 weeks to fully restore normal operations. The impact is not limited to the U.S. East Coast but also extends to transatlantic routes.

From a European perspective, there are typically 23 weekly sailings between Europe and the U.S. East Coast, with the return trip from the U.S. East Coast to Europe taking approximately two weeks. This means that container shipping capacity from Europe to the U.S. East Coast will be reduced in mid-October. Essentially, a half-week delay in anchorage means that half of the capacity expected to be available in Europe two weeks later will not be delivered on time but will instead be delayed. As a result, transatlantic westbound market capacity this week is expected to decrease by about 10-15%.

 

(International Logistics & Freight)

(International Logistics & Freight)

Moreover, due to differences in sailing distances and recovery times, capacity in other regions such as South America and the Far East will also be affected to varying degrees, though the impact will be more dispersed and delayed. In South America, this situation will occur in the second half of October; for the Far East, the decline in capacity is expected to be seen around mid-November.

 

END

(International Logistics & Freight)

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(International Logistics & Freight)

(International Logistics & Freight)

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