ALERTS & ​ADVISORIES

Strike Alert: Day 2 of East and Gulf Coast Port Shutdown & Escalating Global Disruptions

By
October 2, 2024
Strike Disrupting East and Gulf Coast Ports—Immediate Business Impact
Strike Disrupting East and Gulf Coast Ports—Immediate Business Impact

The strike has entered its second day, and the global impact is growing more pronounced. Yesterday's announcement from the White House confirmed the U.S. administration's support for the International Longshoremen's Association (ILA) in their labor dispute. With no significant concessions from the U.S. Maritime Alliance (USMX) on the horizon, it appears increasingly likely that this conflict will extend beyond just a few days, potentially lasting for an extended period. The prolonged uncertainty in port operations is compounding supply chain disruptions across industries worldwide.

Key Updates from Major Carriers:

  1. CMA CGM Declares Force Majeure: CMA CGM has invoked force majeure due to the strike, citing Term 10 of their Bill of Lading. As a result, operational costs from vessel delays at East and Gulf Coast ports will be charged to cargo on the water as of October 1st, 2024. A Local Port Charge (LPC) will apply to all incoming cargo from October 11th, but this will not include additional operational costs under Term 10(a).
  2. ONE's Force Majeure & Route Adjustments: ONE has also declared force majeure, invoking rights under Clauses 17 and 18 of their Bill of Lading Terms. In addition, the carrier has adjusted routes, with the “NYK Demeter” on the AL5 Eur-America service now skipping Port Everglades and discharging USEC cargo in Halifax instead.
  3. Montreal Terminal Strikes: Strikes at the Maisonneuve and Viau terminals in Montreal continue, with operations expected to resume by October 3rd. Other terminals are functioning, but the disruption is already causing ripple effects across the supply chain.

   

What to Expect:

The effects of the strike are beginning to take hold, with growing congestion in Central American hubs and a significant drop in export capacity from Europe and South America. Delays in U.S. vessel arrivals will lead to further congestion across global trade routes, creating additional bottlenecks for shippers worldwide.

  1. Export Bottlenecks: As vessels fail to arrive from the U.S., export capacity from Europe and South America will diminish. This will trigger a ripple effect across regions, delaying shipments and complicating global trade flows.
  2. Carrier Rate Increases: Along with the operational delays, businesses should expect rising logistics costs. All carriers have already implemented surcharges, and other rate hikes are expected as the strike continues.
  3. Air Freight Demand and Rising Rates: With ocean freight options severely constrained, demand for air freight is surging. This increased demand is driving up air freight rates significantly, making it a more costly but crucial option for time-sensitive shipments. Businesses relying on urgent deliveries should prepare for elevated costs in this sector as capacity tightens.

   

Mitigation Strategies:

  1. Explore Air Freight Options: Given the strain on ocean freight, air freight is emerging as the fastest alternative for critical shipments. However, businesses should anticipate higher costs due to skyrocketing demand.
  2. Plan for Extended Delays: Even after the strike concludes, a backlog of cargo will take weeks to clear. Businesses must adjust timelines and inventory planning to accommodate extended transit times.
  3. Review Carrier Contracts: With force majeure clauses now in play, it is essential to review shipping contracts to understand responsibilities regarding surcharges and rate increases. Clarifying these terms now will help avoid unexpected costs.

   

JAS Worldwide Is Here to Help:

JAS Worldwide is committed to supporting you through these challenging times. Our team is actively monitoring the situation and is ready to offer tailored solutions, including air freight options and alternative routing strategies, to ensure your supply chain remains operational. Contact your JAS representative today to discuss how we can help minimize the impact of these disruptions and develop a logistics plan suited to your business needs.

No items found.
Linkedin Logo

Alerts & ​Advisories

NEWS

Stay in the know with JAS
Advisories
news.

Latest News

Dubai South, the largest urban master development focusing on aviation, logistics, and real estate, has inaugurated the new regional headquarters for JAS Middle East, a global leader in logistics and supply chain solutions.

Dubai South, the largest urban master development focusing on aviation, logistics, and real estate, has inaugurated the new regional headquarters for JAS Middle East, a global leader in logistics and supply chain solutions.

The inauguration ceremony was attended by HE Edoardo Napoli, Consul General of the Republic of Italy in Dubai, Biagio Bruni, Founder & Chairman of JAS Worldwide, Mohsen Ahmad, CEO of the Logistics District, Dubai South, Erwin Wittemaier, Area VP of JAS Middle East, as well as other senior executives from both entities.

Designed to set new benchmarks in sustainability, efficiency, and technological innovation, the 19,170-square-meter ‘Build-to-Suit’ facility marks a milestone in the company’s regional expansion. This ESG-compliant warehouse is tailored to meet specific logistics needs, reinforcing the company’s commitment to growth and excellence while enhancing its ability to serve the entire Middle East market.

The facility will include racked and bulk storage, three temperature-controlled chambers, and 12 loading bays with dock levellers and roller shutter doors. Standing over 14 metres at its apex, it will adhere to the latest firefighting regulations. The office space will span two floors. Additionally, solar panels will be installed on the roof of the facility to offset utility costs and allow the property to achieve ESG credentials.

In his comments, Mohsen Ahmad, said: "We are pleased to attend the official opening of JAS Middle East’s new headquarters at Dubai South. This new facility will cater to the UAE and the wider Middle East region through best-in-class logistics solutions. We are proud to see the Logistics District flourishing with global industry leaders such as JAS, recognising the strategic advantages we offer to support their growth and expansion. With its cutting-edge design and ESG-compliant infrastructure, this facility enhances Dubai South's role in shaping the future of aviation and logistics in the region."

Biagio Bruni said: “This facility is a testament to our focus on innovation, sustainability, and excellent service. We are proud to strengthen our presence in this dynamic region and look forward to continuing to support our customers with tailored and innovative logistics solutions."

Representing the pinnacle of logistical innovation encapsulated within a premier infrastructure network, Dubai South’s Logistics District offers premier services and operations as well as uninterrupted access to Jebel Ali Port via a bonded logistics corridor. The district comprises multiple zones, which have direct access to the cargo terminals at Al Maktoum International Airport; EZDubai, a fully dedicated e-commerce free zone; and a Contract Logistics Zone.

Our Foreign-Trade Zones in the USA and Panama help you mitigate tariffs, manage costs, and stay agile in today’s evolving market.

As a trusted international freight forwarder, we understand the challenges that come with navigating global trade, especially with the recent announcement of reciprocal tariffs. Now, more than ever, it’s crucial for businesses to stay agile and optimize their supply chains. We are excited to offer you strategic solutions through our Foreign-Trade Zones (FTZs) in the USA and Panama to help mitigate tariff impacts and streamline your logistics.

Take Advantage of Our FTZs in the USA

Our FTZs located across the South, East, and West Coasts of the USA offer unparalleled benefits to help you manage costs, build inventory close to your end-consumer, and remain competitive. Here’s why you should consider utilizing these zones:

  • Duty & Tax Deferral: Import goods into the USA without paying duties and taxes when they are admitted to the FTZ. Duties are only paid when goods are entered for consumption  in the USA.
  • Duty Elimination: Goods admitted into zone status and subsequently re-exported from the US Customs territory are not subject to US import duties.
  • Inventory Management: Build up inventory close to your market without worrying about immediate tax and duty implications. This allows you to stay responsive to demand fluctuations, reducing costly delays and speeding up your time-to-market.
  • Reduced Costs: With the current uncertainties around reciprocal tariffs, using FTZs can help shield your goods from excessive duties, offering a buffer against tariff hikes that might otherwise impact your bottom line.
  • Strategic Locations: With our FTZs spread across key US regions, you can strategically position your inventory closer to major consumer markets, allowing for quicker distribution and reducing shipping costs.

Panama as a Key Logistics Hub for the Americas

Additionally, our operations in Panama provide you with access to one of the most important logistics hubs in the Americas. With direct access to the Colon Free Zone and proximity to major shipping routes, Panama offers several advantages for your logistics strategy:

  • Strategic Location: Positioned between North and South America, Panama serves as a gateway to both markets, offering a prime location for distribution throughout the Americas, the Caribbean, and the USA.
  • Colon Free Zone: As one of the largest free zones in the world, the Colon Free Zone offers significant tax and duty exemptions, providing an ideal environment for goods transshipment, warehousing, and re-exportation.
  • Local Expertise: With our own offices and operations in Panama, we have a deep understanding of local regulations and logistics dynamics. We can help you navigate Panama’s benefits seamlessly, ensuring that your goods are efficiently moved through the region.
  • Reduced Tariffs & Import Taxes: Similar to FTZs in the U.S., Panama’s free zones allow companies to store, process, or re-export goods without paying duties or taxes upfront. Taxes and import duties are only due if the goods are eventually brought into Panama for local consumption — otherwise, they can be re-exported tax-free to their final destination.

Why This Matters Now

With the new reciprocal tariffs being announced, it’s critical to find ways to lower your exposure to these increasing costs. Both our USA FTZs and Panama operations provide solutions that allow you to store, manage, and distribute goods with significant cost savings, particularly when facing unpredictable tariff changes.

By leveraging our FTZs and Panama’s logistical advantages, you gain flexibility, efficiency, and a competitive edge in today’s rapidly changing global trade environment.

Let’s Talk!

Our team is ready to discuss how our FTZs in the USA and our Panama logistics hub can benefit your business. Don’t wait—take full advantage of these strategic locations and the opportunities they present during these uncertain times.

Contact us today to learn more or schedule a consultation with one of our experts!

By combining efficiency with eco-friendly practices, JAS ECONTAINER not only reduces environmental impact but also offers cost savings and operational efficiencies, driving meaningful change in the industry and paving the way for a greener future, one shipment at a time.

At JAS, sustainability is a journey we're deeply committed to, and Earth Month serves as an ideal moment to shine a spotlight on initiatives that embody this commitment. One initiative that continues to drive positive change is JAS ECONTAINER, our innovative ocean freight solution designed to enhance operational efficiency while reducing environmental impact. 

Redefining Ocean Freight with JAS ECONTAINER 

JAS ECONTAINER combines the efficiency of headload shipments with eco-friendly practices. This approach has been at the forefront of our efforts for some time now, as highlighted by Vice President, Global Head of LCL, Peter Sinka. 

"In our ongoing journey towards sustainability, JAS ECONTAINER stands as a testament to our commitment to environmental responsibility," says Sinka. "By encouraging frequent replenishment and eliminating the pressure to fill containers to capacity, JAS ECONTAINER helps shippers reduce inventory costs, optimize warehouse space, and mitigate supply chain disruptions." 

The Environmental Imperative 

JAS ECONTAINER isn't just about operational efficiency—it's about driving meaningful change in the industry. Sinka emphasizes the product's positive environmental impact, citing its adoption of Marine Biofuel programs through insetting to achieve a net-zero carbon footprint. 

"Our goal was to create a product that not only meets modern supply chain challenges but also aligns with our commitment to sustainability," Sinka explains. "By choosing JAS ECONTAINER, shippers not only benefit from cost savings and operational efficiencies but also contribute to a greener, more sustainable future." 

A Competitive Edge 

Beyond its environmental benefits, JAS ECONTAINER offers a competitive edge in the market. Sinka notes that the product bridges the gap between traditional LCL and FCL offerings, providing cost-effective solutions for shipments ranging from 20 to 50 CBM. 

"Traditionally, LCL shipments face competitiveness challenges beyond a certain volume threshold," Sinka observes. "JAS ECONTAINER's pricing methodology ensures cost-effectiveness even for larger shipments, making it a preferred choice for shippers seeking optimal value and sustainability." 

Embracing a Greener Future 

As businesses worldwide prioritize sustainability and operational efficiency, JAS ECONTAINER emerges as a catalyst for positive change. Its flat-rate pricing model, strategic consolidation strategies, and eco-friendly initiatives not only drive cost savings but also empower shippers to make environmentally conscious choices. 

"In a world where sustainability and efficiency go hand in hand, JAS ECONTAINER offers a compelling solution," Sinka concludes. "We invite businesses to join us in embracing a greener future—one shipment at a time." 

Our Sites use cookies for analytics purposes. For more information about the cookies we use on our Sites or how you can disable them, please see our Cookie Policy.