With the strike underway along the US East and Gulf Coast, everyone (cargo owners, freight forwarders and the rest of the world), are preparing for significant disruptions to their supply chains. With the U.S. government taking the position that employers United States Maritime Alliance (USMX) have not bargained in good faith with the International Longshoremen’s Association (ILA), ocean cargo and logistics operations expect to face massive delays, increasing exponentially with every day of stoppage. For CFI, this most immediately will represent additional competition for available space to move cargo into and out of the United States by air. Some ocean shippers, fearing the probability of a strike, have already transferred volumes to air and secured capacity.
For the majority of ocean shippers, however, turning to air freight will come with challenges. This sudden uptick in demand – both in the near term during the strike and in the days (or weeks) after reopening – will place additional pressure on airlines. This comes as they switch to winter schedules, reducing frequencies, aircraft sizes and destinations with high passenger loads during the summer months. Experts predict that the imbalance between supply and demand, coupled with the duration of the strike and recovery, will impact rates. China’s approaching Golden Week celebrations during which time factories close and exports are curtailed will have the effect of creating capacity in the marketplace, but airlines will make commercial decisions on prioritizing express and guaranteed products, leaving other shippers scrambling for space to keep their goods moving.
Thanks to our nearly fifty years in business, CFI has built relationships with airlines across all trade lanes into and out of the United States. The business we give them year-round places us in the position to secure space for our customers, even with the demands for additional cargo from new air shippers. In this time of heightened demand, though, we are advising our shippers to work closely with their CFI representatives, communicating anticipated space needs as early as possible. This allows us to book and protect their shipments. This information also helps us investigate and protect additional options if the product permits, including trucking to another US airport for departure or utilizing a service transiting another airport or country en route to the final destination.
There is no consensus opinion as to how long the strike will last, but the effect on the US economy will grow with each passing day. Along with those effects will be the demand placed on air freight, an already finite resource, and CFI stands ready to ensure our customers’ shipments continue to move on time and as required.
