Shipping firm executive says port strike on US East Coast will cause supply chain problems from the start.

The French container carrier CMA CGM's North America CEO warned on Wednesday that a strike by dockworkers on Oct. 1, at ports along the U.S. East Coast, Gulf of Mexico and the Caribbean Sea would disrupt the flow of cargo into the country. The International Longshoremen's Association represents 45,000 dockworkers at 36 ports, including New York/New Jersey and Savannah, Georgia. The union has promised to stop working if a new contract is not in place by the expiration of its current six-year labor agreement on September 30th at midnight.

George Goldman said, "The moment you shut the door, everything starts to back up," on a webcast by the Port of Los Angeles.

He said that "one day is not enough" to close a port.

CMA CGM belongs to the United States Maritime Alliance, an employer group that negotiates with the ILA. Ports that could be affected are responsible for about half of U.S. imported goods. Retailers, manufacturers, and other ocean carriers are worried about cargo being stuck in idled facilities. They have moved some cargo to West Coast ports to avoid this. Sea-Intelligence analysts, a Copenhagen-based firm that provides shipping advice, estimate that it will take between four and six days to clear a strike-related backlog.

Sea-Intelligence stated that a two-week strike may mean ports will not be able to return to normal operation until 2025.

Experts in transportation said that goods from Europe, India, and other countries that depend on direct routes over the Atlantic Ocean will be affected most.

Imports into the busiest U.S. West Coast port are also surging. This is because CMA CGM and Maersk, as well as other large container carriers have also been stocking up on Halloween costumes and holiday apparel in anticipation of any possible labor action. Manufacturers have also been stocking up on solar panel and other goods that could be subject to tariff increases.

In August, the Port of Long Beach recorded its busiest month for 113 years, with a volume jump of nearly 34% compared to the previous year, and boosted by a 40% increase in imports.

Los Angeles, the neighboring port, reported a volume increase of 16% in August. This was largely due to an 18% rise in imports.

Gene Seroka is the executive director of the Port of Los Angeles. He said that it was difficult to quantify the increase in cargo from other ports. Los Angeles, however, can still handle around 1.2 million 20 foot equivalent units per monthly, as opposed to the 960 597 TEUs processed in August.

Seroka replied, "We can handle the cargo."

(source: Reuters)