US port strike hit WSCA perishable exports, supply chains: sources

Continued unloading and processing delays at US East Coast ports due to the longshoremen's strike earlier in October has left West Coast South America agricultural product and seafood exporter hesitant to send cargoes to the US ports, according to market sources.

The strike by the International Longmen’s Association, which shut the 36 US East and Gulf Coast ports Oct. 1-3, was suspended after the union and the United States Maritime Alliance, representing port operators, reached a tentative agreement.

Some of the East Coast ports affected by the strike were key hubs for food imports from South America: Chile, Peru and Colombia together have accounted for 25% of fruit and vegetable imports into the US year to date, according to the US Department of Agriculture. Chile and Ecuador, meanwhile, sent 18% of seafood products and poultry exports into the US year to date. The delays are not expected to cause any near-term significant changes in food prices or availability, the USDA has said.

While the length of delays at the US ports are not clear, one North American logistics source said he thought each day of the strike "will cause a week's delay."

The threat of such a backlog from the port shutdowns has many South American exporters cautious.

"While East Coast ports strike recovery is on the way it may take a few weeks to fully recover," according to a freight-forwarding source

Other sources on USEC trade lanes agreed with the sentiment.

"It seems the trend is the same," a WCSA logistics source said. "They won't ship until they see a steady situation."

In Brazil, on South America's Atlantic Coast, exporters meanwhile offered mixed perspectives of the impact of the strike.

One logistics source said he did not plan to ship anything until his company's USEC port destination was back at its previous operating capacity.

"I have a 20' dry container to be shipped to ECNA," he said. "I will only ship it after being sure the port of NY is operating as before strike."

Another Brazil source said he believes there must be some backlog at USEC port, "but nothing dire."

"The movement we’re noticing is some carriers announcing some port omissions, in hopes of providing better schedule reliability," he said. "Honestly, we haven’t seen any kind of exporter holding back up until now, even 'reefer' containers. Only the ones who already had bookings in hands were worried last week, but this week it’s 'all good.'"

The available container capacity for routes connecting the West Coast of South American to the US East Coast is more limited than on other service lines to the USEC, such as CMA CGM’s Asia-to-USEC which offers up to 15,000 twenty-foot equivalent unit ships. Therefore, leaving the supply chains reliant on these routes more vulnerable to operational efficiency and potentially restricting the flow of goods during critical shipping windows, as was the case with the early peak season seen on US coasts as importers frontloaded ahead of port strikes.

The two main carriers between West Coast South America and the US East Coast are CMA CGM and MSC.

CMA CGM's Americas XL service is a weekly connection to/from Port Everglades, Florida; Philadelphia; and New York from/to Buenaventura, Colombia; Guayaquil, Ecuador; Callao, Peru; and San Antonio, Chile. Vessel capacities range from 2,345 twenty-foot equivalent units to 2,824 TEUs, according to CMA CGM’s service description. The route was “designed for perishables and fresh fruit,” according to the carrier’s website.

MSC's Ecuador-NWC & Scan Baltic USA service lane offers ships up to 9,000 TEUs. According to the Jacksonville Port Authority, which is one of the offered port stops, the service line is “ideal for moving a variety of goods, including reefer cargoes, food products, clothing, and other retail items.”

Neither CMA CGM nor MSC returned queries for comment.