The United States is on the brink of a major strike at its East Coast and Gulf Coast ports, which could lead to chaos for ocean freight services if an agreement is not reached in the next week.

Talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have broken down, as we fast approach the expiry date of the existing contracts on September 30th.

The ILA union have threatened a walkout of its 85,000 members at 36 ports from October 1st, as the dispute continues over wages, bonuses, pensions and the introduction of automation.

There were hopes that the Biden administration would use special powers to intervene when 177 US trade associations signed a letter urging it to take action. However, that hope disappeared last week when the government declined to do so.

Ocean freight carriers have been busy confirming that emergency surcharges will be applied from October for ocean freight services to and from North America, Mexico and the Caribbean. While the levels vary from carrier to carrier and from service to service, they appear to range between $500-$1000 per TEU.

The Port of New York/New Jersey, the largest of the ports due to be impacted, confirmed they have already started preparations for a complete work stoppage from next week. Hopefully, an agreement can be reached in the next few days.