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Maersk Warns Dockworkers Strike Could Hit Supply Chain
https://www.whatjobs.com/news/usa/us-business-news/maersk-warns-of-supply-chain-disruptions-and-cost-increases-amid-us-dockworkers-strike
By Nagasunder in US business news, posted October 1, 2024
Shipping giant Maersk has issued a warning about delays and increased costs, and logistical challenges resulting from the ongoing US dockworkers strike.
The strike is expected to significantly disrupt supply chains and impact businesses that rely on these crucial shipping hubs.
Key Impacts of the Strike
Supply Chain Delays
The strike, involving members of the International Longshoremen’s Association (ILA), is likely to lead to delays in cargo movement at ports that handle over 50 percent of American import and export volumes.
Maersk has warned extended disruptions may result in higher costs due to container shortages and reduced operational efficiency.
Contingency Measures by Maersk
The company announced it has contingency plans to minimize disruptions and maintain smooth operations. These plans include alternative vessel arrangements, depending on the duration and extent of the labor dispute.
Maersk will implement a local port disruption surcharge for all cargo moving to and from US East Coast and Gulf Coast terminals.
This surcharge will range from $1,500 to $3,780 per container, subject to regulatory approval and the overall impact on the supply chain.
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Background on the Strike
Members of the ILA, representing 45,000 dockworkers, began the strike on Tuesday, after the expiration of their contract with port employers.
They are demanding a 77 percent wage increase over six years as a condition for returning to negotiations with maritime employers.
Maersk’s Advisory
Maersk emphasized that the surcharge is necessary to cover the higher operational costs incurred due to the service disruptions, ensuring the sustainability of their services and ongoing support for customers' supply-chain requirements.
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