The impact of a potential strike in the US East Coast ports would take from days to several weeks to be cleared, according to a new analysis by Sea-Intelligence, as the labour agreement between the US East Coast port workers' union, ILA and the terminals organization, USMX, expires on September 30.
ILA has insisted that if a new agreement is not in place by then, they will begin a strike on October 1.
With this, Sea-Intelligence analysed the impact in terms of actual container volumes and how long it would potentially take to remove the impacted containers once the strike is over.
"Using historical data, we estimate US East Coast handling volumes of 2.3 million TEU in October, which translates into 74,000 TEU per day, split 36,000 on imports and 38,000 on exports. For empties alone, a strike would mean the inability to load 20,000 TEU each day," the Danish maritime analysis firm said.
It added that once a potential strike is over, this buildup of containers would have to be handled in addition to the normal flow.
The capacity with which to clear this backlog equals the excess capacity available in the port systems on the East Coast.
Sea-Intelligence said excess capacity in this context is the ability of the port to handle volumes above what is actually handled, and one way to estimate this excess capacity is to look at the maximum containers ever handled on the East Coast versus the expected handling in October 2024.
"We estimate that the port system in October would have an ability to increase port handling by 13% compared to the expected 2.3 million TEU," it said.
[Source: Sea-Intelligence]
Citing the data (shown above), Sea-Intelligence noted that it will take time to clear out the backlog of 74,000 TEU created from one day of strike at different levels of excess capacity.
"As we estimate the East Coast ports to have 13% excess capacity over the expected normal flow of 2.3 million TEU in October, then it would take 6 days to clear the backlog from 1 day of strike," commented Alan Murphy, CEO, Sea-Intelligence.
He noted that if the ports have just a little more excess capacity available, this would more realistically bring this figure down to 4-5 days.
"However, this means that a 1-week strike in the beginning of October, would not be cleared until mid-November. If we get a 2-week strike, then realistically, the ports would not be back to normal operations until we are into 2025," Murphy added.