Chaos is Building for Shippers

I'm continuing my coverage of the current shipping strikes. As the East and Gulf coast ports strike hits its third day, the nationwide logistics system is beginning to show signs of stress, with thousands of containers dumped at the wrong ports and billions of dollars in trade at anchor on ships. I'm personally being impacted through work as we are trying to reroute newly purchased equipment that was scheduled to be brought in through the port in New York. What we are seeing is ocean carrier surcharges for shipping clients are beginning to mount, and the need to use trucking and rail to move diverted cargo to ultimate destinations is adding to supply chain costs.

At this time, there are no signs that the International Longshoremen’s Association and United States Maritime Alliance are back at the negotiating table in an attempt to work through significant differences on wage increase levels and use of port automation, despite consistent efforts by the Biden administration to get the parties back into collective bargaining.

I saw one story today that some containers that were once destined for the Port of Savannah in Georgia diverted to the Port of Norfolk in Virginia in the last hours before the strike began. A once original 10-mile round trip for their truck driver moving a container in Savannah would have cost $300. Now with the diversion to Virginia, the round trip is almost a thousand miles which increases the costs to $2,000 to cover the fuel and time on the road. It's the added inland charges and stresses that I'm not hearing much about.

There are many ships that are choosing to wait out the strike, for now with vessel queues on the rise off the coast of Savannah, Norfolk and New York. The number of vessels waiting outside ports could reach more than 100 by the end of the week.This means we will start to see some shortages of goods as time goes on.

I was just talking to @bozz in the comments of my last post that there are news artcles out of people starting to horde toilet paper which is not even imported through these ports. People are starting to go crazy over this like in the early days of the pandemic. Thje stock market is down, but has seemed to hold off any major corrections afters the drop earlier this week.

I've been impressed with the stability all things considered. With this strike and geopolitical issues in the Middle East I would not have been surprised if we were down more this week. I guess the markets still have one more day this week so we will have to see what we get.

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