Port Strike Averted, But U.S. Import Surge Expected To Continue

FILE PHOTO: Docked cargo ships are loaded with shipping containers at Port Elizabeth, New Jersey, U.S., July 12, 2023. REUTERS/Mike Segar/File Photo

A potential crisis at U.S. East and Gulf Coast ports has been averted as the International Longshoremen’s Association and U.S. Maritime Alliance reached a tentative six-year labor agreement, preventing what would have been the second strike in four months.

The agreement comes just days before a January 15 deadline, when a temporary contract extension was set to expire. “We have narrowly averted a strike, but that doesn’t mean there hasn’t been an impact,” noted Ben Hackett, Founder of Hackett Associates.

Despite the positive development, U.S. ports are experiencing a significant surge in container volumes. According to the Global Port Tracker report, released jointly by the National Retail Federation and Hackett Associates, November saw ports handling 2.17 million TEUs, marking a 14.7% increase year over year.

The import surge is attributed to two key factors: retailers’ preemptive measures to avoid potential strike-related disruptions and concerns over President-elect Trump’s proposed tariff increases.

NRF Vice President Jonathan Gold explained that retailers have been front-loading spring merchandise to ensure adequate stock levels.

“The new contract brings certainty and avoids disruptions, and we hope to see it ratified as soon as possible,” said Gold. “But the agreement came at the last minute, and retailers were already bringing in spring merchandise early to ensure that they would be well-stocked to serve their customers in case of another disruption, resulting in higher imports. The surge in imports has also been driven by President-elect Trump’s plan to increase tariffs because retailers want to avoid higher costs that will eventually be paid by consumers. The long-term impact on imports remains to be seen.”

Looking ahead, port volumes are expected to remain strong through early 2025, with January forecast at 2.16 million TEU, up 10% year over year. However, February is projected to see a 4.5% decline due to Lunar New Year factory closures in China, before rebounding in March with a 10.6% increase.

The tentative labor agreement, which still requires ratification, brings much-needed stability to the maritime sector, though the long-term impact of potential tariff increases on import volumes remains uncertain.

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.