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Tags: port | strikes | supply chain | costs | goods | surcharges | trucking

Chaos, Costs Mount Amid Continued Port Strike

By    |   Thursday, 03 October 2024 07:40 PM EDT

Chaos is mounting as port strikes along the East and Gulf coasts stretch into their third day Thursday, reported CNBC.

The strikes have caused a nationwide logistics nightmare, with containers being dumped at the wrong ports by the thousands, and billions of dollars in trade being trapped on ships.

Clients are getting hit with surcharges as goods are now being rerouted by trucking and rail, which is adding to supply chain costs.

So far, there's no sign that the International Longshoremen's Association and United States Maritime Alliance are working toward negotiation on wages and use of port automation. The Biden administration continues to work to get the pair back to collective bargaining, but to no avail.

According to Vizion, which tracks container movements, close to 2,000 shipments may have been dropped at the wrong port.

Paul Brashier, vice president of global logistics at ITS Logistics, said he has clients whose containers were dumped at the wrong port.

"These diversion drop-offs inflate the inland transportation cost," Brashier told CNBC.

"Trucking companies get paid for a round trip where the truck driver needs to pick up and drop off the containers at the same port. The diversions are adding to transportation costs because of the additional mileage."

Brashier said out-of-network diversions are driving up shipping costs.

"In most cases, little warning was given by the ocean carriers, which left many shippers scrambling to procure last-minute trucking capacity in congested ports they do not have familiarity with."

According to data from Everstream Analytics, more than a dozen container ships are currently waiting in the port anchorage in Freeport, Bahamas, after being diverted there. At the same time, cargo that currently sits in Halifax is set to be shipped to New York by rail.

According to the analysis by Everstream, other ships are waiting out the strike — for now.

Stew Leonard Jr., CEO of grocer Stew Leonard's, told CNBC that customers looking for fresh produce and fish may have to consider alternatives.

"Pineapples, bananas, and mangos are exported to the East Coast as well as other vegetables like asparagus. Bananas are the No. 1 fruit export in our produce department.

"We will get them, but it may be a longer transit from China, or fly and truck them in. This will drive up prices because of the price of logistics.

"That's when you see parents opting to put an apple in the lunch box rather than bananas," he said.

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US
Chaos is mounting as port strikes along the East and Gulf coasts stretch into their third day Thursday, reported CNBC.
port, strikes, supply chain, costs, goods, surcharges, trucking, containers, fresh produce
406
2024-40-03
Thursday, 03 October 2024 07:40 PM
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