Complete Story
10/09/2024
Update on East Coast Port Strike
Source: Greg Lovensheimer, Millcraft, October 8, 2024
As you may have heard, the East Coast Port strike has been suspended following a tentative financial agreement. While this is good news, significant issues remain unresolved, and certain impacts may continue to affect supply chains. Here’s what it means for you and how Millcraft is here to support your business through these ongoing challenges.
What You Need to Know:
Temporary Return to Work
Dockworkers have returned to work under a tentative agreement that includes a 66% wage increase over six years. However, the unresolved issue of automation means that the agreement is contingent upon a comprehensive deal being finalized by January 15. If no deal is reached, disruptions could resume.
Delays in Processing and Backlogged Cargo
The strike has already left 38 cargo vessels offshore waiting to unload, which may result in 6-7 days of processing delays. Additionally, many manufacturers held shipments or delayed production to avoid demurrage charges, which could extend disruptions for up to two months as trade flows normalize.
Prioritization of High-Value Cargo
As the backlog clears, port authorities are prioritizing high-value cargo. Since paper and paperboards are considered commodities, they may face further delays in processing. This may impact lead times, particularly for imported products.
Potential for Increased Costs
Ultimately, someone in the supply chain needs to pay for the 66% wage increases over the term of the agreement. We expect these costs to pass along the supply chain, as well as additional costs still to be accounted for due to flow disruption. These additional expenses may create inflationary pressure on goods throughout the supply chain, which we are actively monitoring to ensure we continue to provide you with reliable, competitive options.
What This Means For You:
While the return to work is a positive step, the strike’s impact on supply chains is still being felt. Millcraft is committed to supporting our customers with strong inventory levels and Service Level Agreements (SLAs) that guarantee access to essential supplies. There is no need to take drastic measures by stocking up out of concern for the unknowns. Our team is actively managing and prioritizing orders to ensure fair access for all customers, and we are working with our global suppliers to reinstate our normal flow of goods. However, we encourage you to continue to plan ahead.
