Looming Strike Threatens U.S. Ports: Hapag-Lloyd Announces Surcharges
With the labor contract unresolved and fears growing for another potential longshoremen’s strike at U.S. ports on the East and Gulf Coast, Hapag-Lloyd has taken proactive measures by announcing surcharges for all containers booked to these ports. The strike could begin in just three weeks, with the surcharges set to kick in shortly after if a strike does occur.
Last week, Hapag, Maersk, and CMA CGM issued warnings to customers regarding the unresolved situation and began implementing their contingency plans. The master contract between the International Longshoremen’s Association and the US Maritime Alliance, which was extended during the October strike, now has a new expiration date of January 15, 2025. The ILA has cited an impasse with terminal operators over the issue of semi-automation and has threatened to resume the strike the day after the contract expires.
In a customer alert, Hapag stated, “To help manage the potential impact of ongoing challenges at U.S. East Coast and Gulf ports, we are introducing a Work Disruption Surcharge (WDS) and Work Interruption Destination Surcharge (WID), effective January 20, 2025, in the event of a strike.” The surcharge aims to cover additional costs incurred from labor disruptions, strikes, slowdowns, unrest, congestion, and other unforeseen events that may lead to operational delays and extra handling, storage, and feeder service expenses.
The surcharges will apply to containers from ports worldwide that are gated-in on or after January 20, with fees of $850 for a 20-foot container and $1,700 for a 40-foot container.
Containers gated in before the specified date or already en route will not be subject to the surcharges.
Industry trade groups have called for both the union and employers to extend the deadline once again while urging them to resume negotiations. However, the union received support from President-elect Trump, who backed their opposition to port automation.
Following the lead of its competitors, Hapag has advised customers to begin preparing for a potential strike. With no resolution in sight and no reports of new talks, the three carriers have encouraged the expedited movement of containers away from the docks in the weeks leading up to the potential strike. While bookings are still being accepted, the carriers have indicated they may explore diversions or other measures. Past strikes have been weathered, but concerns are mounting that this one could result in a prolonged shutdown.