Ships will have to wait out US East Coast port strike: ONE CEO

“We're preparing now for the 30th of September when we expect that the terminals all along the East Coast will come to a stop,” Jeremy Nixon, CEO of Ocean Network Express (ONE), said on the sidelines of Marine Money Asia in Singapore.

Employers at US East Coast ports represented by the United States Maritime Exchange (USMX) and the unions International Longshoremen Association (ILA) remain at impasse over a new six-year labour contract to replace the existing one which expires on 30 September. The ILA has pledged that the 85,000 dockworkers it represents will strike coast wide from 1 October if there is no new agreement, an event shipping lines and cargo owners have been gearing up for.

Nixon said that the great majority of ONE’s customers had brought forward shipments to minimise risk, while a small number have diverted cargo to move via West Coast ports.

However, in the event of a strike from 1 October shipping lines will not be able to divert vessels bound for the US East Coast to West Coast ports as the ILA has made clear it would picket such a move.

“So, the vessels are now on their way to the East Coast will have to sit and wait until that industrial disruption is resolved,” Nixon said.

In a customer update on 20 September Maersk said it expected “vessels enroute to ILA-impacted ports to anchor temporarily”, although did not say for how long.

Related:Shippers rush to clear import containers from US East Coast ports

Asked about the option of diverting ships to Mexican or Canadian ports on the East Coast Nixon responded, “Mexican ports are running at very high utilisation levels, as are the Canadian ports right now. We have no additional capacity available as an industry to move freight through the Mexican ports or the Canadian ports to make up anything close to the US requirements.”

Meanwhile concern remains over the possibility of rail freight strike action in Canada. A lockout by employers Canadian National (CN) and Canadian Pacific Kansas City (CPKC), and subsequent strike by the Teamsters Canada Rail Conference (TCRC) in August lasted 18 hours before the Federal government stepped in. However, the threat of further industrial reaction remains.

“The concern is still in Canada, where we still have an ongoing industrial dispute with the railroads between the employers and the railroad operators and we wait to see whether that can be resolved in a peaceful way or whether we would then potentially have another risk of a rail strike sometime in October and November,” Nixon explained.