While there is a sense of relief sweeping over the United States supply chain and, by extension, the economy, following a tentative agreement struck late yesterday by the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), port operations will not immediately return to normal. However, the situation did not fully escalate to the levels that many industry stakeholders had cautiously expected.
With the strike lasting only the better part of three days, current levels of port congestion, vessels at anchor, and increasing dwell times resulting from the brief strike need to be addressed. This is especially important considering that one week of port disruption typically leads to at least one month of delays, which increase as cargo moves inland.
That was the word from Mia Ginter, director of North American ocean shipping at C.H. Robinson.
Ginter explained that the U.S. West Coast, the Canada gateway, and non-ILA ports—all popular contingency routes—are experiencing congestion. Dwell times at the ports of Los Angeles and Long Beach have been as long as 30 days for some vessels. She added that rail transport from the West Coast is also facing delays of more than two weeks in some cases.
“Since rail typically takes longer to recover from disruptions, delays are expected to continue for months from high-volume ports,” she told LM.
Ginter also observed that several vessels are at anchor or waiting to berth in the East and Gulf coasts.
“Vessel bunching and port congestion are expected at these ports, as there is an immediate backlog of vessels looking to dock,” she said. “This volume is in addition to the containers that couldn’t move out of the port prior to the strike. Recovering and collecting containers that had to be dropped at different port locations may further tie up vessels and increase pressure on available inland transportation and equipment.”
As seen in the past, when port congestion and dwell times increase, Ginter noted that equipment is tied up longer, and rates tend to rise as equipment availability decreases. This is occurring at a time when the U.S. Southeast is still recovering from Hurricane Helene, she said.
“While truckload capacity remains steady and available across impacted regions, load-to-truck ratios are rising on the West Coast,” Ginter explained. “We expect this to continue as rail delays linger, elevating the need for trucks and transloading services. Air freight and expedited LCL services will likely continue to play a role in moving priority freight as the market recovers.”
An analysis from Everstream Analytics largely aligned with Ginter’s observations.
Everstream explained that with each day of strike typically requiring about one week to clear the backlog, the three-day all-out strike will likely take at least three weeks to return to normal operations at U.S. ports. The firm added that some shippers will now face the challenge of recovering containers discharged at other ports outside of the U.S., such as the Bahamas, as carriers managed the situation.
“The number of container ships waiting outside U.S. Gulf and East Coast ports has decreased overnight to 54, down from the peak of 59 yesterday,” said Everstream. “This is largely due to ships moving into the ports, especially in Savannah and Charleston, in anticipation of container terminals reopening this morning. However, the queue outside the Port of New York-Newark has grown further since yesterday, with 18 ships waiting outside, followed by Savannah (10) and Norfolk (9). The total number of TEUs on these ships has also slightly decreased by 20,000, down to 386,000 TEUs from 406,000 the day before.”
With the tentative agreement between ILA and USMX expiring in January, there is clear pressure on shippers to prepare for potential disruptions, both operationally and from a supply chain resilience perspective.
John Donigian, Senior Director of Supply Chain Strategy at Moody’s, highlighted this in observing that while the suspension of the East and Gulf Coast port strike until January 2025 offers temporary relief, it underscores unresolved issues in negotiations over wages, job security, and automation.
“The new January deadline also threatens to exacerbate supply chain bottlenecks, as it coincides with critical shipping cycles, including inventory replenishment post-holiday, spring season product positioning, and preparations for the Chinese New Year,” Donigian said.
He stressed that retailers and manufacturers must remain vigilant, as further disruptions could significantly impact both consumer goods and industrial components, placing additional strain on an already stressed logistics network.
“While larger retailers may have built up some inventory, smaller businesses and sectors relying on just-in-time shipments face higher risks,” he added. “If an agreement isn’t reached by January, we could see a repeat of delays and cost surges, impacting consumer prices and market stability. For every week of strike action, there is typically a month of backlog and chaos, so businesses need to continue planning for potential longer-term supply chain disruptions well into 2025.”
Moreover, Donigian noted that by delaying the strike, stakeholders have acknowledged the stakes, as businesses must now remain proactive in implementing strategies to offset potential revenue risks and diversify their supply chain routes where possible.
“Flexibility and contingency planning will be crucial over the next few months, given the industry’s reliance on these key ports combined with the ongoing labor disputes,” he concluded.
