Another major port strike in the pulp and paper industry is imminent

The International Longshore Association (ILA) announced that port workers at 36 ports along the Atlantic and Gulf coasts of the United States may go on strike on October 1st.

The announcement was made after negotiations for a new master contract broke down, which is set to expire on September 30, 2024. The possibility and duration of a strike will depend on the outcome of subsequent negotiations.

The affected ports handled approximately 60% of the US shipping volume, including ports in New York and New Jersey, Savannah, Charleston, Jacksonville, and Baltimore.

ILA is headquartered in North Bergen, New Jersey, representing 85000 workers along the eastern and Gulf Coast of Mexico. The union demands a significant increase in wages for its members and protection from the impact of automation transformation.

ILA Executive Vice President Dennis A. Daggett commented, "From Searsport, Maine to Brownsville, Texas, we are about to engage in one of the toughest battles the union has faced in decades. In his speech, Daggett mentioned ILA's last strike, which occurred in 1977 and lasted for 44 days.

Long term strikes will seriously affect the delivery of paper and cardboard from Europe to the United States. According to statistics from AF&PA, the delivery volume of printing and writing paper in Europe for the first six months of 2024 was 492000 tons, and the delivery volume of box board paper was 412000 tons.

During the same period, American factories exported 842000 tons of wood pulp and 293000 tons of kraft paper to Europe.

According to data predictions, even if the strike lasts for a few days, it will have a huge impact on ports in the eastern United States. The expected throughput for the East Coast in October is 2.3 million TEUs. During the strike, 74000 TEUs of goods will be blocked daily, including 36000 imported and 38000 exported containers, with an additional 20000 empty containers not being processed in a timely manner. After the strike ends, how to clear the backlog of goods will be a greater challenge.

In 2002, the strike at ports in the western United States lasted for 11 days, and it took 6 months for the backlog of goods to be fully processed. The strike in the East Coast of the United States will not only affect the East Coast, but also the West Coast, Canada, Mexico and other places, resulting in longer transportation times and additional costs. Therefore, companies such as Wal Mart and Target have prepared goods in advance to ensure that the supply chain is not affected. In July, the import volume of containers in the United States exceeded 2.5 million TEUs, a year-on-year increase of 16.8%, reaching a new high in 26 months.

In addition, according to HSBC's analysis, 15% of the global container fleet may be affected by the strike at the US East Coast ports.

HSBC Bank stated that the bottleneck on the US East Coast may mean that the global container fleet will face capacity challenges. Due to the turbulent situation in the Red Sea, global fleets are already overwhelmed, although the situation has eased recently with the delivery of new ships and a slowdown in trade volume