This week:

• ILA prepares port employers, dockworkers for strike to start on October 1 
• US retailers see continued imports surge, even after months of frontloading
• Truckload rate hikes in 2025 now appear to be unlikely, DAT analyst says
• Bangladesh supply chain in chaos as country is rocked by unrest and political instability
• Trans-Atlantic ocean carriers impose rare peak season surcharges
• Port of Virginia opens intermodal yard to add resiliency against weather and rail congestion

ILA Preps for East and Gulf Coast Ports Strike on October 1

Following weeks of stalled negotiations, the International Longshoremen’s Association (ILA) is now preparing for a strike that could start on October 1. Industry observers warn that a work stoppage of even a few days would cripple ports on the US East and Gulf Coasts. The union’s contract with the United States Maritime Alliance (USMX) expires on September 30, and the two sides have been at loggerheads over issues of automation and wages.

The ILA claims automated systems violate existing agreements and threaten jobs. For its part, the USMX maintains it is in compliance with the current contracts, including provisions regarding automation.

This dispute has caused contract renewal talks to stall, with ILA refusing to budge on automation and significant wage increases. The proposed pay hike—almost 80% over a six-year contract—far exceeds raises granted to US West Coast dockworkers in their most recent contracts.

By law, unions are required to give employers 60 days’ notice of potential strikes. In a statement released Saturday, August 3, the ILA said it had recently sent employers letters indicating that current agreements “would not be extended.” The ILA said its Wage Scale Committee will meet on September 4 and 5 to review the demands it will make in master contract negotiations.

The ILA will also use the meeting to “instruct locals on strike strategies and what to expect if the ILA is on strike at the beginning of October.”

Subscribe to JMR’s Weekly Supply Chain Roundup!

Stay informed with the latest supply chain news, trends, and insights. Get it delivered directly to your inbox every week.

US Retailers Say Imports Not Slowing Down, Possible Record Surge in August

US retail industry groups the National Retail Federation (NRF) and Hackett Associates are anticipating a “near-record surge” in imports this month, according to the groups’ joint publication, the Global Port Tracker (GPT).

The forecast comes after some carriers and analysts had predicted declining figures during the traditional August-to-October peak shipping season. These projections were based on an expected reduction in cargo frontloading, which has marked much of 2024’s import activity. But instead of a slowdown, the GPT again upgraded its short-term forecast for imports, projecting year-over-year increases every month through at least the end of the year.

In a statement accompanying the most recent GPT, NRF Vice President for Supply Chain Jonathan Gold said the potential ILA strike at US East and Gulf Coast ports plays a large part in the continuing surge. “Many retailers have taken precautions, including earlier shipping and shifting of cargo to West Coast ports,” Gold said.

Truckload Rate Hikes in Question Amid Ongoing Demand, Growth Uncertainty

US shippers are expressing skepticism about the likelihood of truckload rate increases in early 2025, according to transportation industry data provider DAT Freight & Analytics. While spot rates have risen since May, the contract market remains soft, tipping the balance of pricing power toward shippers. DAT’s analysis says economic indicators pointing toward slower growth and uncertainty about freight demand are the two main reasons for the cautious outlook.

Dean Croke, principal analyst at DAT, told the Journal of Commerce (JoC) last week, “We’re seeing more upward movement in national average spot rates. The market is trying its hardest to claw its way back off the bottom, but it’s slow going.”

Croke adds that the truckload contract market has failed to reach an inflection point. “Shippers are still beating contract rates down on average,” Croke told the JoC. “Across our data, shippers still have pricing power.” As a result, Croke says shippers that were anticipating increases in contract truckload rates in early 2025 now expect rates to remain flat.

Civil Unrest Leaves Bangladesh Supply Chain in Chaos

Multiple sources who recently spoke with the JoC report civil unrest in Bangladesh has brought the country’s supply chain to a standstill. The developments follow weeks of civil unrest and political turmoil in the Indian subcontinent nation. Chittagong Port, Bangladesh’s primary trade gateway, is nearly shut down, and inland transportation networks are paralyzed.

Carrier sources told the JoC they are struggling to manage operations and may soon suspend shipments. The crisis comes as major shipping lines recently expanded services to Bangladesh to capitalize on growing apparel exports. In particular, Maersk and Mediterranean Shipping Co. had just begun tapping into Chinese garment exports.

Trans-Atlantic Carriers Announce Rare Peak Season Surcharges

Ocean carriers recently announced peak season surcharges (PSS) on the Trans-Atlantic trade lane in reaction to declining rate trends. The rarely imposed surcharges take effect on or before September 1. Westbound rate levels have declined steadily for the past few months despite solid trade volumes on the Europe-US trade lane.

Mediterranean Shipping Co. (MSC), Hapag-Lloyd, Ellerman City Liners, and CMA CGM are among the carriers that announced various surcharges in response.

MSC is imposing a surcharge of $1,000 per FEU. Meanwhile, Hapag-Lloyd’s PSS was set at $800 per FEU. Ellerman City Liners announced a general rate hike of $700 per FEU from Europe and the UK to US East Coast ports. These surcharges all take effect on September 1. On August 15, CMA CGM will levy a rate increase and a PSS of $150 per FEU each from Northern Europe to the US; and a $500 per FEU surcharge from the Mediterranean to the US, effective September 1.

Port of Virginia Opens Larger Intermodal Yard at Norfolk International Terminals

The Port of Virginia officially opened a larger intermodal yard at Norfolk International Terminals (NIT) on Tuesday, August 6. The expansion will provide resiliency against weather disruptions in the port or rail network congestion.

The increased capacity is expected to benefit Midwest cargo owners most, thanks to more efficient rail transport to cities like Chicago, Cincinnati, and Detroit. The intermodal yard is part of a broad modernization project, including harbor deepening and terminal expansions to accommodate larger vessels.