In general, the strike affects U.S. trade and has repercussions on its value chains and trading partners.
The strike by dockworkers at the East Coast and Gulf ports of the United States, which began early Tuesday morning, primarily affects trade with China and could represent logistical opportunities for Mexico, according to a report from the U.S. Congress.
The International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance, the employers representing maritime carriers and port terminal operators, were unable to renew their six-year labor-management agreement that expired on September 30, 2024.
– The strike of 85,000 dockworkers, the first on the East Coast of the United States since 1977, affects 60% of the import and export containers shipped through U.S. seaports (the West Coast seaports cover the remaining 40%), according to official 2022 statistics.
– In general, the strike affects U.S. trade and has repercussions on its value chains and trading partners.
– According to the analysis, China is often the main origin or destination of containerized goods at East Coast and Gulf seaports.
– Ships trading between these ports and China sail through the Panama Canal, which is slower but less expensive than transporting goods by rail across the United States to or from West Coast ports (known as the “land bridge” route).
While East Coast U.S. importers and exporters could turn to the land bridge route, this could be cost-prohibitive for lower value-to-weight ratio cargoes.
This ratio is also an obstacle for most maritime cargo shipments using airplanes, as air cargo transport is only economical for products with the highest value-to-weight ratio, such as medical instruments.
Although the port of Montreal in Canada is an economical alternative for shippers in the northeastern and northern midwestern United States, there are also ongoing labor disputes at that port.
The analysis adds that Texas shippers could explore rail connections with Mexican ports.
From and to the ports involved in the strike, containers carry a wide variety of products.
Retail products and manufacturing parts tend to represent a large portion of imported containers, and U.S. export containers often consist of intermediate products and agricultural items.
Common containerized product imports include clothing, beverages, household items such as furniture and appliances, and manufactured parts such as electrical machinery parts and iron and steel products.
The East and Gulf ports are important for certain industries and commodities. For example, 45% of containers exported from Houston are loaded with resins or plastics. Raw cotton and poultry exporters rely on the port of Savannah, which is the largest poultry export port in the country.
Philadelphia and Wilmington (Delaware) are rivals as the main ports handling fresh fruit imports in refrigerated containers.
Source: El Economista
