Factbox: Companies have planned for US East Coast ports strike

Nordstrom

02/10/2024 08:41

(Adds Ahold Delhaize)
       Oct 2 (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
  MAERSKb.CO     on 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
  CHRW.O         with 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
 Norfolk         Terminal at the Port of Virginia have also
 International   extended their gate hours for the weekend
 Terminal        before Sept. 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
 AG & Co         Stihl 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
 Brands  DBI.N   at 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
 Manufacturers   U.S. 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."
 McCormick &     The company said it co-ordinated mitigation
 Company         plans with domestic suppliers with inbound
  MKC.N          supply coming from outside U.S.
 National        The retailer group urges U.S. President Joe
 Retail          Biden to use all available authority, tools
 Federation      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 for
  WMT.N          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 expect
 Department of   shortages anytime in the near future for most
 Agriculture     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. 
 Merit Medical   The medical device maker's CEO Fred
 Systems         Lampropoulos said the company anticipated the
  MMSI.O         strike and switched a portion of its shipment
                 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.
 Ahold Delhaize  The owner of the Food Lion and Hannaford
  AD.AS          grocery chains said it has been preparing for
                 the situation and remains in close dialogue
                 with suppliers, including local ones, to
                 ensure stores are stocked. It expects minimal
                 impact on its supply chain for now.
 
 (Reporting by Abhinav Parmar and Ananta Agarwal in Bengaluru;
additional reporting by Christy Santhosh and Gianluca Lo Nostro;
Editing by Alan Barona, David Evans, Anil D'Silva and Milla
Nissi)
 ((abhinav.parmar@thomsonreuters.com))