A looming East Coast port strike could cause “chaos,” CEO says

For the first time in decades, North America's largest maritime workers union is planning a strike that could potentially disrupt supply chains and throw the container trade into “chaos,” according to the CEO of Container xChange.

“The congestion and delays in these major ports will significantly impact the availability of containers, increase costs and disrupt schedules,” says Christian Roeloffs, with whom the company works more than 1,500 shipping companiessaid in a customer advisory on Thursday.

The International Longshoremen's Association (ILA) and its more than 85,000 longshoremen at more than 100 ports on the East and Gulf Coasts have already threatened a strike on October 1. If there is a strike, it would be the first time since 1977.

The union is far from reaching an agreement with the United States Maritime Alliance, which represents operators of more than a dozen major ports. On Thursday the alliance filed a complaint about unfair labor practices and called on the National Labor Relations Board to require the union to resume negotiations. The White House on Thursday called that the parties can resolve their differences and prevent a strike.

Read more: A major port strike in the US could soon shake the economy. Here's what you should know

Practically all industries are affected by a possible strike. Shipments of foreign fruit, including pineapples, bananas, citrus and grapes, that normally travel through the U.S. East Coast and Gulf Coast could be in the crosshairs in the event of a strike. Cars and medicines would also see major disruptions in the delivery of goods to stores, which could lead to a rise in prices across the country.

Grain exports are one of the rare exceptions, although other agricultural exports – such as soybeans – would still be affected. The disruptions could cost the U.S. economy more than $1 billion for each day the strike lasts, while Oxford Economics said a prolonged strike could affect up to 100,000 jobs.

“Companies are acting now to reroute shipments and secure their container supplies or risk being stuck in a crowded and costly wake,” Roeloffs said, noting that “small traders in particular” could come under pressure.

MSC, a major shipping company, said Thursday that booking adjustments, including transfers to other ships or cancellations, may be necessary, according to a Travel tips. It also said it reserved the right not to accept new refrigerated bookings at affected ports in the event of a strike and asked customers to restock products before October 1.

Hapag-Lloyd plans to introduce a “Work stoppage target surcharge” for imports to the Gulf and the East Coast of the USA. Maersk has issued a similar surcharge that will come into effect on October 21, depending on the impact of the potential supply chain disruption. Another major player, CMA-GCM, announced on September 17 a series of changes to its tariffs for the ports, which will take effect on October 11.