Factbox: Companies have planned for US East Coast ports strike

Nordstrom

01/10/2024 16:22

(Adds McCormick, National Retail Federation, BNSF Railway,
Walmart, US Department of Agriculture, Merit Medical Systems,
CSX)
       Oct 1 (Reuters) - Some 45,000 union workers walked off
the job at seaports on the U.S. East and Gulf Coasts on Oct. 1,
cutting off vital trade arteries just weeks ahead of the
nation's presidential election.
    The International Longshoremen's Association (ILA) union,
which represents dockworkers across 36 ports on the U.S. East
Coast and the Gulf of Mexico, remains deadlocked with the United
States Maritime Alliance (USMX) employer group on wage issues.
    The stoppage is the first coast-wide ILA strike since 1977
and halts the flow of about half the nation's ocean shipping. A
two-week strike could mean that ports would not return to normal
operations until 2025, according to Sea-Intelligence, a
Copenhagen-based shipping advisory firm.
    Here is what global companies and stakeholders have said
regarding a potential strike:
     
 Costco          U.S. retailer Costco's contingency plans
 Wholesale       include pre-shipping some products to get in
  COST.O         holiday goods early and preparing to use
                 different ports, Costco's CEO Ron Vachris said
                 last week.
 Maersk          The Danish shipping and logistics giant said on
  MAERSKb.CO     Sept. 30 a longer dispute may exacerbate
                 disruptions, affecting import and export
                 activities, container availability, and overall
                 operational efficiency. 
                 The company has said it will introduce a port
                 disruption surcharge on all cargo moving to and
                 from the U.S. East Coast and Gulf Coast
                 terminals from Oct. 21 ranging from $1,500 to
                 $3,780 a container.     
 C.H. Robinson   "We have been working on contingency plans with
  CHRW.O         customers for months, helping them import
                 freight early and diversify freight to other
                 ports," Mia Ginter, director of North American
                 shipping, told Reuters. A significant volume
                 shift to the West Coast could challenge rail
                 services, requiring more use of truck and
                 transload services, Ginter added. 
 Maher           Maher and Maersk's APM, which are members of
 Terminals and   the employer negotiating group (USMX), said
 APM Terminals   they were keeping their terminals at the Port
                 of New York and New Jersey open for two
                 additional hours to clear cargo before the
                 potential strike.
 Garden City     The Garden City Terminal at the Port of
 Terminal and    Savannah and the Norfolk International Terminal
 Norfolk         at the Port of Virginia have also extended
 International   their gate hours for the weekend before Sept.
 Terminal        30 to clear cargo.
 Hapag-Lloyd     The shipping giant has said it is closely
  HLAG.DE        monitoring the strike situation and will keep
                 customers involved as developments unfold.
 Andreas Stihl   The German chainsaw manufacturer Andreas Stihl
 AG & Co         AG & Co told Reuters it is also developing
                 contingency plans to keep exports flowing from
                 its factory near the Port of Virginia, but
                 didn't elaborate. Stihl's U.S. plant ships
                 products to over 80 countries.
 Designer        Ronnie Robinson, chief supply chain officer at
 Brands  DBI.N   DSW parent company Designer Brands, said the
                 company has shifted half of its usual imports
                 through the East Coast to the West Coast.
                 Robinson added that his company cannot risk
                 late deliveries to clients like Macy's  M.N ,
                 Nordstrom  JWN.N , and Dillard's  DDS.N 
                 department stores, even if it means paying more
                 for shipments. 
 National        NAM CEO Jay Timmons said a strike would throw
 Association of  manufacturing supply chains throughout the U.S.
 Manufacturers   into disarray. "Billions of dollars of goods -
                 from food to vehicles to electronics - rely on
                 access to the East and Gulf Coast ports,"
                 Timmons said on Monday. 
 Inter IKEA,     "We are closely monitoring the situation and
 which makes     hope for an agreement between the parties as
 IKEA furniture  soon as possible. It is too early to comment on
                 any possible constraints the strike might have
                 on our supply chain."
                             The company said it co-ordinated
 McCormick &     mitigation plans with domestic suppliers with
 Company         inbound supply coming from outside U.S.
  MKC.N          
 National                    The retailer group urges U.S.
 Retail          President Joe Biden to use all available
 Federation      authority, tools including Taft-Hartley act, to
                 immediately restore operations at all impacted
                 container ports, get the parties back to the
                 negotiating table and ensure there are no
                 further disruptions
                 
 BNSF Railway                The railroad said it was carefully
                 monitoring the situation with the East and Gulf
                 Coast ports and was fully prepared for any
                 shifts in demand for rail service, adding that
                 its local teams continue to work with its
                 terminal operators on the specific needs to
                 meet the demands of their facilities.
                 
 Walmart                     The retailer said it has prepared
  WMT.N          for unforeseen disruptions in its supply chain
                 and maintains additional sources of supply to
                 ensure it has key products available for its
                 customers when and how they want them.
                 
 U.S.                        The department said it does not
 Department of   expect shortages anytime in the near future for
 Agriculture     most items and adds it is keeping an eye on
                 downstream impacts in west, and will continue
                 to monitor and work with industry to respond to
                 potential impacts. 
                 
                             The medical device maker's CEO Fred
 Merit Medical   Lampropoulos said the company anticipated the
 Systems         strike and switched a portion of its shipment
  MMSI.O         to air transport before July.
                 
 CSX  CSX.O      The railroad said it has been flexible, adding
                 service in collaboration with western partners
                 to provide customers with alternative options
                 to West Coast ports.
 
 (Reporting by Abhinav Parmar and Ananta Agarwal in Bengaluru;
additional reporting by Christy Santhosh; Editing by Alan
Barona, David Evans and Anil D'Silva)
 ((abhinav.parmar@thomsonreuters.com))