This is due to a disagreement over automation and wages, leaving shippers concerned over possible strike action when the current contract expires by October this year.

Although there are currently no signs that the ongoing negotiations have affected volumes into the US East and Gulf Coast ports, this latest setback may lead to concerned shippers looking at contingency plans and beginning to ship via the US West Coast.

The Asia-US Trade has already shown signs of an early peak in demand with stronger than expected cargo volumes for this time of year, thought to be due to shippers wanting to mitigate the increasing freight costs and to allow for the increased transit times due to the ongoing Red Sea disruption. We may now see a further spike in demand with shippers wanting to avoid possible strike action in the lead up to the critical holiday period for retailers, shifting peak season to be even earlier than usual.

Should this be the case, the increase in volume into USWC ports may result in congestion and delays, and carriers will need to look to increase capacity on these lanes to cater for the uptick in demand. Rail services would also come under strain from the increased volume, resulting in further delays being likely.

“The potential increase in demand added to the already limited capacity can be expected to cause rates to soar even higher and faster than we have seen in recent months.” - says Dan Williams (Director - USA)

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