US port strike ends leaving huge cargo backlog to be cleared (updated)

Evergreen Marine Taiwan

04/10/2024 07:02

* 
      54 container ships queued outside ports, risking shortages
    

        * 
      Tentative deal includes 62% wage hike over six
years-sources
    

        * 
      Strike cost U.S. economy $5 billion/day, JP Morgan
analysts say
    

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      Shipping stocks tumble across Asia
    

  
 (Adds more shipping shares, comments in paragraphs 6-10)
    By Doyinsola Oladipo and David Shepardson
       Oct 4 (Reuters) - U.S. East Coast and Gulf Coast ports
began reopening on Thursday night after dockworkers and port
operators reached a wage deal to settle the industry's biggest
work stoppage in nearly half a century, but clearing the cargo
backlog will take time.
    The strike's end came sooner than investors had expected,
taking the fizz out of shipping stocks across Asia on Friday as
freight rates were no longer expected to surge.
        At least 54 container ships queued up outside the ports
over three days as the strike prevented unloading and threatened
shortages of everything from bananas to auto parts. The figure
by Everstream Analytics was calculated at 4:00 p.m. ET (2000
GMT). More ships are sure to arrive.        
    The International Longshoremen's Association (ILA) workers
union and United States Maritime Alliance (USMX) port operators
announced the deal and an immediate end to the strike late on
Thursday. Sources said they had agreed a wage hike of around 62%
over six years, raising average wages to about $63 an hour from
$39 an hour. 
    Shares in shipping companies in Asia fell heavily across
Asia.
    "Shipping stocks had previously rallied on expectations of  
 price increases triggered by the strike by U.S. dock workers
and the tense situation in the Middle East," said Taishin
Securities Investment Advisory analyst Tony Huang.
    "Now the strike will end, meaning the price rise factor is
no longer in play."
    Japan's Nippon Yusen  9101.T , which had hit a record high a
day earlier, tumbled 9% and Kawasaki Kisen  9107.T  fell 9.5%.
Mitsui O.S.K. Lines  9104.T  also fell 7% in its heaviest
trading day for 18 months.  .T 
    In South Korea, HMM  011200.KS  dropped 6.6% to a three-week
low and Pan Ocean  028670.KS  dropped 5.7%, while Taiwan's
Evergreen Marine  2603.TW , Wan Hai Lines  2615.TW  and Yang
Ming Marine  2609.TW  also fell between 8.8% and 10% in their
heaviest drops for several months. 
    In Hong Kong, Orient Overseas (International)  0316.HK  was
the biggest loser on the Hang Seng index with an 8% drop.  .HK 
    The ILA launched the strike by 45,000 port workers, their
first major work stoppage since 1977, on Tuesday, affecting 36
ports from Maine to Texas. JP Morgan analysts have said the
strike would cost the U.S. economy around $5 billion per day.
    Retailers account for about half of all container shipping
volume, with Walmart  WMT.N , IKEA, and Home Depot  HD.N  among
those that heavily rely on the East Coast and Gulf Coast ports,
according to eMarketer analyst Sky Canaves.
    According to bill of lading data from Import Yeti, a data
firm, some of the importers relying on affected ports range from
IKEA and Walmart to Goodyear Tire & Rubber  GT.O .
    East Coast ports are also key destinations for coffee, and
prices have already risen due to the port disruptions.
    The strike ended with the tentative deal on wages, though
the two sides will continue hammering out other issues,
including ports' use of automation that workers say will lead to
job losses. 
    "The decision to end the current strike and allow the East
and Gulf coast ports to reopen is good news for the nation’s
economy," the National Retail Federation said in a statement.
"The sooner they reach a (final) deal, the better for all
American families."

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Cargoes stuck at US ports as labor strike continues    https://reut.rs/3zSu1g3
TIMELINE-US East, Gulf Coast port workers go on strike,
threatening global      ID:nL1N3LC14X 
Containerized goods to East/Gulf and West Coast of US    https://reut.rs/3zArl6G
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Additional reporting by Jihoon Lee in Seoul, Emily Chan in
Taipei, Tom Westbrook in Singapore; Writing by Peter Henderson;
Editing by Sonali Paul)
 ((Doyinsola.Oladipo@thomsonreuters.com))