Maersk Cautions on Delays and Higher Costs Amid U.S. Dockworkers Strike

By Dominic Chopping

A.P. Moller-Maersk said the U.S. dockworkers strike will affect supply chains, leading to delays in cargo movement, increased costs, and logistical challenges for businesses relying on U.S. East Coast and Gulf ports.

"Longer labor dispute durations may exacerbate disruptions, affecting import and export activities, container availability, and overall operational efficiency," it wrote in a customer advisory.

Members of the International Longshoremen's Association, which represents 45,000 dockworkers at East Coast and Gulf Coast ports, began picketing early Tuesday at cargo terminals that handle more than half of American import and export volumes as the contract with port employers expired.

The ILA is seeking a 77% wage increase over six years as a condition to sit down to talks with maritime employers, The Wall Street Journal reported, according to a person familiar with the negotiations.

The Danish shipping company said it has contingencies in place, with vessel plans that can be actioned depending on the duration of the labor dispute to minimize disruptions and ensure smooth operations.

The company already has plans to implement a local port disruption surcharge for all cargo moving to and from the U.S. East Coast and Gulf Coast terminals, ranging from $1,500 to $3,780 a container. The charge is subject to regulatory approval and depends on the impact of the disruption to the supply chain.

"This surcharge is necessary to cover the higher operational costs that will be incurred due to the service disruptions, ensuring the sustainability of our services and ongoing support for [customer] supply-chain requirements," it said.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 01, 2024 04:08 ET (08:08 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.