Source: Supply Chain Dive   
Date: 15th January 2025

A strike across East Coast and Gulf Coast ports was averted. However, shippers still took action to mitigate potential port closures, lengthening cargo delivery times and elevating volumes in the short term.

Before the International Longshoremen’s Association and the United States Maritime Alliance reached a tentative deal on a six-year contract, shippers front-loaded cargo and paused bookings, which caused hiccups for some supply chains. The carrier said to expect delays at certain ports as elevated volumes are worked through.

Because the deal came at the “last minute,” according to a Jan. 10 press release from the National Retail Federation, retailers brought in spring merchandise early to be well-stocked in the event of a strike, increasing import levels.

However, retailers were “judicious” about which products they front-loaded, putting them in a good position to address extra costs created by mitigation actions, according to an NRF spokesperson.

In addition to front-loading cargo, shippers also sourced from secondary supply and shifted a portion of the inbound flow to West Coast ports. These actions have resulted in increased inventory, longer transit times and higher transportation costs.

The impact will likely be seen on the balance sheet (inventory) or cost of goods sold (COGS), and it may affect margins and working capital in the short term.

While a variety of shippers will be impacted by the actions taken ahead of the potential strike, the U.S. export reefers and hazmat freight will be more acutely affected by carrier mitigation actions.

With rail lines already initiating shutdown steps, shippers could see delays as they re-start services.

Even without strike concerns, shippers are front-loading additional cargo due to the upcoming Lunar New Year on Jan. 29 and expected tariff increases under the incoming Trump administration. As a result, shippers are facing tightened capacity.