How long could it last?

There is no way to say how long the strike may last, nor how long the supply chain will take to recover. If October’s strike action is to be used as a guide, a short term strike of 1-2 days again could take 5-7 days to work through the backlog. Whereas a strike lasting for 1-2 weeks would cause much more severe strain on the supply chain and are likely to significantly increased costs for freight stuck in transit and could take months to clear.

What is the expected impact on transit times?

Carriers would look at possible re-routing of vessels in transit to the US East Coast (USEC) and US Gulf Coast (USGC) ports. Transit times are expected to lengthen as carriers will look to slow stream or divert to try to mitigate congestion should a strike go ahead.

Some had previously re-routed to US West Coast (USWC) ports, which could increase transit time vs USEC & USGC by around 10-14 days. This will depend on ocean vessel transits and potential congestion at port, and on the rail network because of the extra volume.

Ships will not be able to dock or be discharged whilst strike action is taking place.

Trucking capacity will be limited due to a rush to remove available import cargo from port or return export cargo. This demand will increase spot and on-demand rates for all domestic moves for drayage, rail, intermodal, LTL and FTL.

Carrier Booking Policies:

More information is expected to be communicated in the coming weeks but below is a summary of what we had learnt from previous strike action:

→ Export Bookings via US East and Gulf Coast

Carriers are likely to initially continue to take bookings for dry cargo, however, will reserve the right not to accept bookings for refrigerated cargo.

Some hazardous bookings via rail are likely to be cancelled or rejected.

If the strike occurs, all USEC and USGC export bookings for voyages on or after 14th January will be affected.

Shippers are to expect rolls to other vessels or booking cancellations.

→ Import Bookings via US East and Gulf Coast

If strike commences, all USEC and USGC import bookings for voyages on or after January 14th will be impacted.

Shippers are to expect rolls to other vessels or booking cancellations.

It is expected that carriers will continue to accept bookings for dry cargo. Refrigerated cargo may have bookings rejected or cancelled should the strike action take place.

Many carriers announced that they will refuse any liability resulting from strike action due to containers left uncollected from terminals and this will likely be the case again.

What will the strike mean to shipping costs?

Carriers will look to file surcharges and policies for disruption, congestion, detention and demurrage, as well as any other emergency surcharges. There will be a range of effective dates and charges.

→ Demurrage & Detention

Most carriers are suggesting that they will act as follows in the case of detention and demurrage. We will continue to keep our customers informed on a case by case basis as more information is provided.

Demurrage:

- Coastal Ports: Clock likely to be stopped/paused now the port has closed.

- Inland Terminals - Imports: Carriers and terminals will likely continue with standard policy.

- Inland Terminals - Exports: Carriers are likely to follow standard policy.

Detention:

- Coastal Ports: Carriers are likely to stop the clock as the port is now closed until it re-opens and/or return locations become available.

- Inland Terminals: Carriers and terminals are likely to continue with standard policy.

It is not yet completely clear whether detention and demurrage will be waived or paused on any import/export containers not able to have been removed from the port prior to strike action taking place.

Depending on the duration of any strike action and the size of the backlog, it is likely there will be delays in securing trucking due to high demand when terminals reopen. This means that when demurrage and detention begins again, be prepared for the possibility of these costs being incurred.

Woodland Group will be working with our customers and trucking providers to minimize these costs as much as possible.

→ Diversion / Re-routing / Change of Destination

Carriers will likely consider changes in vessel routings and schedules. This could mean that some containers will be discharged at alternative ports than booked prior to January 14th in an effort to avoid any port strikes. In the event a container is re-routed by the carrier, they will communicate the options available to you. They will likely look to move the containers affected to the original final destination by intermodal (if the option is available) or may offer the option to terminate the container at the alternate port of discharge. Change of Destination (COD) costs associated would be at the discretion of the carrier based on the circumstances. Any costs associated with trucking from the new port of discharge would likely be for the account of the shipper/consignee, depending on incoterms.

Importers may also wish to look at options to terminate containers in transit in USEC or Gulf Coast Ports to avoid potential further delays on the rail. Woodland have Container Freight Stations across the USEC & GC that can support this for transload services.

→ US Domestic Transport

It is expected that, due to the increased demand and pressure on the trucking infrastructure that a prolonged strike will bring, spot and on-demand rates will increase across the USA.

Any containers under the care of a trucker that have been collected from the port or intended to be delivered to the port may be subject to additional waiting time, storage, chassis or pre-pull charges whilst working to deal with any congestion or impacts of closure at the port/terminal.

What are possible contingencies?

→ Redirect to alternative ports

Redirecting shipments via the UWSC may seem like a viable alternative, however, this will be dependent on how long any strike were to last.

Shipping via the USWC on trade lanes on which the UWEC or USGC would not be natural routings, could in most cases increase transit times by at least 10-14 days and could increase costs significantly due to increased port to port and US inland charges to the final destination. Additional demand, potential slow steaming, port congestion and rail terminal congestion, as well as an increase in demand for USWC based trucking and warehousing capacity could also increase cost and transit time.

Existing shippers via the USWC should also prepare themselves for the potential impact on their business for reasons outlined above.

For LCL shipments, Woodland offers consol services to/from US hubs in Chicago and LA via ports on USWC and Canada, which would mitigate disruptions caused by any strike on the USEC and USGC ports. However, these ports are still likely to be impacted by any strike so we can expect transit times to be affected.

→ Air Freight

Consider air freight to avoid any strike action on Woodland air freight services across the USA.

Woodland is able to offer regular air freight services into and out of all major US airports.

Daily airport transfers between Woodland gateway facility in Elizabeth, NJ to/from EWR and JFK.

Woodland airfreight locations covering major airports across the country (JFK, EWR, ATL, ORD, BOS and LAX).

→ Mexico and Canada

Routing via non-US ports to avoid impacts of strike actions is unlikely to be a viable option as these ports and cross-border services would likely suffer congestion from any increased demand, which would in turn increase cost and transit time. Some carriers will not offer through services via Canada or Mexico too, so if terminating in these countries, considerations for potential complications and delays around customs clearance processes on these routes would need to be made.

As the situation will develop over the coming weeks, Woodland Group will continue to monitor the developments closely across the US and will work to provide solutions to customers as the situation evolves.

For questions on your supply chain planning, please contact your local Woodland representative or contact us here.