US port workers, operators reach deal to end East Coast strike immediately

Shares in shipping companies in Asia fell heavily across Asia on Friday as the deal, agreed far sooner than expected, eased the prospects for a surge in freight rates.

 

“Investors who hoped for a short-term rebound in freight charges, which are in a downward trend, are selling as the strike ended,” said Yang Ji-hwan, an analyst at Daishin Securities in Seoul.

 

Evergreen Marine, Wan Hai Lines and Yang Ming Marine in Taiwan fell between 8.8 per cent and 10 per cent in their heaviest drops for several months.

 

The ILA launched the strike by 45,000 port workers, their first major work stoppage since 1977, on Tuesday, affecting 36 ports from Maine to Texas. JP Morgan analysts have said the strike would cost the U.S. economy around $5 billion per day.

 

Retailers account for about half of all container shipping volume, with Walmart, IKEA, and Home Depot among those that heavily rely on the East Coast and Gulf Coast ports, according to eMarketer analyst Sky Canaves.

 

According to bill of lading data from Import Yeti, a data firm, some of the importers relying on affected ports range from IKEA and Walmart to Goodyear Tire & Rubber.

 

East Coast ports are also key destinations for coffee, and prices have already risen due to the port disruptions.

 

The strike ended with the tentative deal on wages, though the two sides will continue hammering out other issues, including ports’ use of automation that workers say will lead to job losses.

 

“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy,” the National Retail Federation said in a statement.

 

“The sooner they reach a (final) deal, the better for all American families.”

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Oct 04 2024 | 9:02 AM IST