Cargo carriers warn port strike could cripple half of US trade

In a customer alert issued, MSC Mediterranean Shipping Co. SA informed that ongoing negotiations between the longshoremen's union and port employers might not reach a resolution by the September 30 deadline, potentially leading to terminal closures starting October 1. This would cause delays in the movement of containers, both imports and exports, via trucks and railroads at ports ranging from Boston to Houston. MSC advised that adjustments in bookings, such as rolling shipments to other vessels or canceling them, might become necessary. The Geneva-based company also stated that while it would continue accepting requests for dry cargo services, it reserved the right to stop accepting new bookings for refrigerated cargo.

Similarly, Hapag-Lloyd AG, the world’s fifth-largest container carrier, warned that bulk and breakbulk cargo might also be impacted. The company emphasized that industrial action would likely drive up freight rates. The Hamburg-based carrier noted that shipping costs, including those for freight, warehousing, and drayage, were expected to rise due to increased demand for alternative routes and port services, with the possibility of emergency surcharges being added to cover extra handling and congestion.

Shifting to alternative routes may not be a simple solution. CH Robinson Worldwide Inc., one of the largest US freight brokerages, cautioned that if the strike commences on October 1, alternative routes could quickly become overwhelmed.

Oxford Economics estimated that a strike could cost the US economy between $4.5 billion and $7.5 billion per week. While this economic hit would be reversed once the strike ended and shipments resumed, even a brief strike could be costly for retailers, manufacturers, and other importers who rely on timely shipments and sufficient inventories ahead of the fourth quarter.

Furthermore, Oxford Economics noted that for each week of cargo backlog, it would take approximately a month to clear the delays, as West Coast ports—potential alternative gateways for goods—are already operating at full capacity.