East Coast and Gulf Coast Port Strike Response Strategy

Ports on the East Coast and Gulf Coast of the United States are important international trade hubs in the United States, handling a large amount of cargo from Asia, Europe and Latin America. As negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Union (USMX) remain unresolved, if no agreement is reached before January 15, the strike could begin as early as January 16, 2025.

Major East Coast and Gulf Coast ports that may be affected include

East Coast: Port of New York and New Jersey, Port of Savannah, Port of Charleston

Gulf Coast: Port of Houston, Port of New Orleans

What impacts may a strike at a port cause?

Cargo backlog and delays

During the strike, port operations will be suspended or significantly reduced, resulting in a large number of ships unable to dock and unload, and cargo backlogs at ports or at sea, unable to enter the supply chain in a timely manner.

Rising transportation costs

Due to port congestion and transportation uncertainty, shipping companies may adjust routes and capacity arrangements, resulting in increased transportation costs. In addition, companies may need to pay additional storage fees, demurrage and other fees.

Supply chain disruptions

Companies that rely on these ports will face problems such as shortages of raw materials and backlogs of finished products, affecting production and sales. Especially for those industries that rely on the just-in-time inventory model, such as the automotive and pharmaceutical industries, strikes may cause serious production disruptions.

Global trade fluctuations

Strikes at ports on the East Coast and Gulf Coast of the United States not only affect the domestic supply chain in the United States, but may also have a chain reaction on global trade. For example, the obstruction of cargo transportation from Asia to the East Coast of the United States may lead to a shortage of raw materials for Asian factories, which in turn affects the stability of the global supply chain.

Alternative port congestion

Other ports may be overwhelmed, exacerbating delays.

These ports handle about 50% of the total US imports in containers each year, as well as more than 90% of European imports and 80% of Latin American imports. The strike caused a large amount of containerized cargo to be stranded at the port and could not be transferred in time, triggering a chain reaction in the global supply chain. According to analysis, the strike will cause billions of dollars in cargo detention costs every day and may shut down about 1.7% of the global container fleet.

Strategies for third-party logistics service providers to reduce the impact of strikes

As a professional third-party logistics service provider, Chinadivision adopts the following strategies to reduce the impact of port strikes on transportation and ensure that delivery time is not delayed as much as possible:

Pay close attention to the progress of negotiations and strike dynamics

Establish an early warning mechanism and pay close attention to the progress of negotiations between ILA and USMX and the dynamics of the strike. Obtain the latest information on the strike in a timely manner, including the scale, duration, and affected ports of the strike.

Plan transportation routes in advance

Before the strike occurs, plan transportation routes in advance and choose to avoid ports affected by the strike. Consider transshipping goods to other ports in non-strike areas, such as ports on the West Coast or ports in other countries. Make full use of the advantages of multimodal transport and combine sea transportation with rail, road and other modes of transportation. In the case of restricted port operations, transport goods from the port to the destination through inland transportation, or transfer goods from other ports to the surrounding areas of the affected ports, and then complete the "last mile" transportation by road or rail.

Optimize logistics processes

Strengthen communication with suppliers and customers to understand their needs and expectations. Optimize logistics processes, improve transportation efficiency, and reduce transit time.

Increase inventory

Communicate with suppliers in advance and increase inventory appropriately to cope with possible logistics disruptions. Ensure that customer needs can still be met during the strike and reduce delivery delays caused by out-of-stock.

Explore alternative transportation methods

Consider using multiple modes of transportation such as air and land transportation to spread risks and speed up the transportation of goods. Although air transportation is more expensive, it can quickly deliver goods to the destination in an emergency and reduce the risk of out-of-stock caused by strikes.

Strengthen risk management

Consider purchasing relevant insurance such as strike insurance to mitigate losses caused by force majeure factors such as strikes. Establish a risk response mechanism and formulate emergency plans to ensure that you can respond quickly and take measures when a strike occurs.

Closely cooperate with logistics service providers

Strengthen communication with logistics service providers to understand their response measures and service guarantee capabilities during the strike. Choose logistics service providers with rich experience and good reputation, such as Chinadivision, to ensure the safe and timely transportation of goods.

Ship in advance

Communicate with customers and suppliers before the strike may occur, and arrange the production and shipment of goods in advance. For example, for goods originating from Asia, load export goods at least one month before the strike to ensure that the goods can arrive at the destination port before the strike occurs.

Stock inventory

Assist customers to establish a reasonable inventory buffer to cope with possible shortages of goods during the strike. In this way, even if port operations are hindered, customers can rely on inventory to maintain normal operations for a period of time.

Strengthen communication and cooperation with all parties

Promptly inform customers of the latest progress and possible impact of the strike, understand customers' specific needs and urgency, and adjust logistics plans based on customer feedback. Maintain a good cooperative relationship with suppliers to ensure that goods can be obtained first during the strike. At the same time, work closely with transporters to understand their transportation plans and capacity arrangements, and jointly cope with the challenges brought by the strike. Maintain communication with port management departments and customs to understand the port's operating conditions and customs clearance policies. During the strike, try to get the support of ports and customs, speed up customs clearance and loading and unloading of goods, and reduce the time that goods stay at the port.

What other measures can be taken to ensure that delivery time is not delayed?

Real-time tracking of cargo transportation status

Use advanced logistics tracking systems to track the transportation status of goods in real time. Discover potential problems in time and take measures to solve them.

Prioritize urgent orders

According to the urgency and needs of customers, give priority to urgent orders. Ensure that urgent orders can be delivered on time and meet customer expectations.

Strengthen communication with customers

Communicate with customers in a timely manner to understand their needs and expectations. Provide accurate transportation information and delivery time to enhance customer trust and satisfaction.

Continuous improvement and optimization

Regularly evaluate and improve logistics processes to improve transportation efficiency and quality. Continuously learn and draw on advanced logistics management experience and technology to enhance their own competitiveness.

When facing the port strikes on the East Coast and Gulf Coast of the United States, we should pay close attention to the progress of negotiations and strike dynamics, plan transportation routes in advance, optimize logistics processes, increase inventory, explore alternative transportation methods, strengthen risk management, and work closely with logistics service providers. At the same time, measures such as real-time tracking of cargo transportation status, priority processing of urgent orders, strengthening communication with customers, and continuous improvement and optimization should be taken to ensure that delivery time is not delayed and meet customer needs and expectations.

Chinadivision, a third-party logistics service provider, can reduce the impact of the port strike on transportation on the East Coast and Gulf Coast of the United States to a certain extent, and ensure that delivery time is not delayed as much as possible, and provide customers with stable and reliable logistics services. If your goods need to pass through the East Coast and Gulf Coast ports, please feel free to contact Chinadivision, we will wholeheartedly provide you with professional solutions and services.