FLEXPORT NOTES LIMITED AIR FREIGHT IMPACT OF US EAST, GULF COAST PORTS STRIKE

A new Flexport analysis shows that the strike at ports on the US East and Gulf coasts has had limited impact on air freight.

 

The labour actions lasted only 72 hours, ending sooner than expected. Members of the International Longshoremen's Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) reached a tentative agreement on wages and agreed to extend the Master Contract until January 15, 2025.

 

The freight forwarder noted that under this tentative agreement — reached on October 4 — the USMX will provide the ILA with a 61.5% wage increase over six years. The two parties have extended their existing master contract until January 15, 2025, and will negotiate on automation and other issues in the meantime. 

  

"The relatively short duration of the ILA strike means that the impact on the broader US economy has been limited. If the strike had continued into next week, the ripple effects could have been massive," Flexport said in a statement.


"While the broader economic impact has been averted, the strike has made an immediate impact on the ocean and air markets," it added.

Flexport noted that in terms of ocean cargo not yet booked, during the strike, bookings to the US East Coast remained open, and we expect them to stay open with the only limitations were rail routings to the US East Coast via LA, but we expect these will soon resume operations as well.

 

"If you have urgent cargo, routing via the West Coast on rail or transloading in LA remains your best option to avoid potential congestion on the US East Coast. Early reports indicated that each day of the strike would've added 5-10 days of port congestion," it added, although emphasizing that congestion shouldn't impact cargo that hasn't sailed yet.

 

"On the whole, air freight saw a limited impact," Flexport said.

 

However, it noted that during the strike, some shippers shifted to air freight to avoid delays in ocean freight. This led to a temporary surge in demand for air cargo services, especially from the Middle East/South Asia (MESA). 

 

"With the strike now resolved, shippers will revert back to ocean freight for cost-effective transportation, stabilizing demand for air freight," the analysis added.