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US container imports skyrocket to highs last seen in the pandemic as strike action across US East Coast ports becomes increasingly likely

US container imports hit record levels in July 2024, as companies around the country sought to beat the potential for delays and disruption due to possible major strike action across East Coast ports.

Research from trade data provider Descartes found that July’s volume of 2,556,180 twenty-foot equivalent units (TEUs) was their third highest ever, only exceeded by the very top months of the pandemic, while August saw only 3% less movements and likewise exceeded 2.5 million TEUs.

The rush has been caused by the potential for a major strike across the US’ most important East and Gulf Coast ports.

The International Longshoremen’s Association (ILA) is preparing for a walk out in October if bargaining for a new contract falls through.

This has caused many companies to rush through shipments, especially for retailers restocking for the holiday period, leading to July imports from China hitting a record high. There is also high demand for goods where East Coast ports are specialised, such as motor vehicles, with passenger car imports up 11% in the year-to-date.

From coast to coast

Increased imports have been felt on both seaboards. The Port of New York and New Jersey reported the busiest July in its history, with these facilities alone recording a total movement of 806,015 Twenty-foot Equivalent Unit (TEU) containers during the month. This represented a Year-on-Year (YoY) increase of 11.1%, but the volume of imports rose even more, climbing 13.5%.

Over on the West Coast, the Port of Los Angeles noted a huge 38% YoY increase in imports of loaded containers in July, shifting 501,281 TEUs.

This even higher change on the West Coast in percentage terms reflects broader anticipation of the strike. Drewry noted “a huge 21% decline in East Coast spot rates,” in its World Container Index for the week of 12^th September, caused by “weak demand” as more goods are shifted away from potentially affected ports. Drewry “expects East-West rates to decrease further in the upcoming weeks,” as this trend continues.

September port traffic is similarly forecast to be notably up YoY according to the National Retail Federation Global Port Tracker, with a projected rise of 13.8% for the month.

What’s at stake

that the ports set to be affected in the dispute were responsible for the movement of 28.4m TEUs of containerised cargo in 2023, or around 550,000 per week, underlining how elevated current levels are with just the Port of New York and New Jersey exceeding that total in July.

According to the Global Freight Monitor from HSBC, Gulf and East Coast ports accounted for the majority of imports into the US.  

Therefore, any strikes could be highly disruptive, especially for import from Europe into the US.

Linerlytica estimates puts the impact at 1.7% of the global container fleet being delayed for every week that the strike continues, rising up to a possible 15% of the global container fleet.

While trade patterns have shifted and will continue to do so as negotiations rumble on, with accelerating affects as the deadline approaches and then into the strike should it go ahead, there are limits to how much mitigation can be done.

West Coast ports do have capacity currently and trade would also shift to Canadian ports, but these would then lead to delays inland, especially through the rail network. Furthermore, capacity is extremely limited for alternative ports facing the Atlantic, therefore putting European and Latin America importers most at risk.

ILA members staff 14 ports on the East Coast, including Baltimore, Charleston, Houston, Savannah and New York.

The risk of strikes

That risk of a major industrial dispute has increased dramatically over the last week. The ILA has said that industrial action will start if a new contract is not reached before the current one runs out on September 30^th.

President Biden stated on 17^th September that he would not invoke federal legislation to provide more time for negotiations.

Meanwhile the ILA is conducting negotiations at a local level and is strongly opposing automation within ports, leading to a considerable distance to cover between it and the United States Maritime Alliance (USMX) with which it is negotiating.