The strike at major ports on the US East Coast, following a stalemate in negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) , threatens to cause chaos in global supply chains , adding to the tensions that are constantly being experienced around the world.
In this regard, CH Robinson highlighted in a statement the domino effect on global trade caused by this cause, since the interconnected nature of global trade means that any disruption in US ports can have global repercussions.
In this regard, CH Robinson said that the strike is already creating bottlenecks at key cargo transit points , which could lead to significant delays, as a one-week port disruption has caused delays of up to a month in international shipments.
Shippers globally with cargo destined for this region from Europe, Latin America, Oceania and Asia are feeling the effects, resulting in disruptions in the flow of goods to and from the United States, Canada and Mexico , and must consider how port closures would affect their cargo.
As seen with other global supply chain disruptions, this cascade would result in additional transit time , additional costs and even potential storage and demurrage charges, the logistics company said.
“The strike could affect five of the ten busiest ports in North America, creating a cascading impact that no sector or region could avoid. Companies with cargo destined for the United States from Europe, Latin America, Oceania and Asia are likely to face delays and increased costs. It is crucial that they communicate with their logistics providers to plan alternative or contingency routes,” warned Mia Ginter, Director of Maritime Export for North America at CH Robinson.
Impact on ports and Mexico’s economy
Mexico and the United States maintain a high-volume, constantly active trade relationship, so any disruption at U.S. ports could impact the flow of goods through other routes such as Laredo and El Paso , important transit points for land trade between the two countries.
Due to its strategic geographic location, Mexico relies heavily on U.S. ports for the import and export of goods, so the strike threatens to cause delays in the arrival of essential inputs and raw materials for the Mexican manufacturing industry, affecting key sectors such as the automotive, electronics and household appliance sectors , among others.
With congestion at U.S. ports, Mexican companies could face additional costs due to route diversions or the need to resort to more expensive transportation methods, such as air.
Mexican exporters could also be affected by the strike, as delays at U.S. ports could prevent Mexican products from reaching their overseas destinations on time, affecting the competitiveness of domestic exports or overwhelming domestic options due to diversions.
CH Robinson shared that while no industry is immune to the disruptions caused by this strike, some will be more affected than others, for example, industries that operate on very tight inventory models, such as the automotive or pharmaceutical industries, even two days of a strike could significantly disrupt their operations, which directly affects the operation of these industries in the country.
In this context, CH Robinson has implemented flexible contingency plans in the event of a prolonged strike, so if a large volume of cargo is diverted to the US West Coast, Mexican and Canadian ports could serve as a viable alternative, along with options such as air freight and port transshipment to expedite the movement of critical goods.
On the other hand, CH Robinson indicated that carriers that choose to redirect their cargoes to the West Coast will have to consider the available capacity and the necessary ground logistics support; in addition, temporary storage for the diverted cargo may be required while capacity is freed up in the interior of the country.
The company also expects that rail congestion to the east could also cause delays, as although railroads are prepared to move freight from Southern California and the Pacific Northwest , longer transit times are expected.
Although air freight is more expensive than other options, it allows for quick rerouting. However, air capacity is already limited by high e-commerce demand from Asia and Red Sea detours.
Ports and alternative modes of transport could quickly become overwhelmed in the event of a prolonged strike at ILA ports, so close cooperation between trading partners and global logistics providers will be crucial to mitigate the impact of this crisis on transatlantic trade.
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