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A possible strike by thousands of dockworkers at East and Gulf coast ports in October could result in major disruptions in the supply chain of goods coming in and out of the U.S., according to an export on container trade.
The International Longshoremen's Association (ILA), representing more than 85,000 dockworkers, may go on strike on Oct. 1 as the union’s contract expires on Sept. 30 and negotiations between the ILA and U.S. Maritime Alliance of terminal operators show signs of breaking down, said Christian Roeloffs, CEO of online container leasing platform Container xChange.
“A strike now appears increasingly likely, threatening to disrupt nearly half of the nation’s ocean trade,” he said on Tuesday.
“The uncertainty is compounded by the fact that the duration of these strikes is unclear — it could be resolved within weeks or drag on for months, as seen with the West Coast strike last year.
“September is traditionally one of the busiest months for U.S. containerized imports, driven by the peak shipping season as businesses prepare for the holiday rush.”
Read Also: Transatlantic Container Shipping Volumes Rise As Possible Strike At U.S. Ports Hovers
But it isn’t just a strike that threatens to disrupt the shipment of goods for the retail, automotive and other sectors, he said.
“This year presents an unprecedented combination of challenges that could heavily impact supply chains. Potential labor strikes, natural disasters, and tariff uncertainties are converging, creating a highly volatile environment for global trade,” he said.
“This also led to the pulling forward of orders by retailers, which led to strong inventories in the U.S.”
A strike could also cause havoc for container leasing and trading companies by causing major delays, port congestion and rerouted cargo, Roeloffs said.
"Companies should anticipate short-term spikes in demand for leased containers as retailers rush to secure goods ahead of potential disruptions, particularly for seasonal inventory and industrial shipments," he said.
“While the threat of strikes looms large, it's important to note that U.S. inventories are currently strong due to the pulling forward of orders earlier this year to avoid existing disruptions.
The retail, automotive and semiconductor industries, all of which could be impacted by a port strike, saw gains and losses into Tuesday’s mid-day trading.
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