The US port strike has caused significant delays, increasing costs for businesses and affecting supply chains. Steel prices may further rise due to high demand, tight supply, and disruptions in material shipments. Find out more below.
What is happening with the US port strike?
The US port strike, starting October 1, involves 47,000 ILA dockworkers demanding higher pay and protections from automation, impacting major Eastern and Gulf Coast ports. While USMX proposed a 50% raise, automation remains a key issue. A brief strike may have minimal impact, but prolonged disruptions could cause major economic consequences, including supply chain delays and daily losses of $1 to $5 billion.
Supply Chain Tightening
A.P. Moller-Maersk warned that the U.S. dockworkers strike will lead to increased costs, delays, and logistical challenges for businesses relying on East Coast and Gulf Coast ports. The company plans to implement a surcharge of $1,500 to $3,780 per container, subject to regulatory approval, to cover rising operational costs from the disruption. Maersk and its rival Hapag-Lloyd, which also plans to impose surcharges, are adjusting vessel schedules and implementing contingency plans to mitigate the impact. The strike, led by the International Longshoremen’s Association demanding a 77% wage increase, could significantly disrupt supply chains, with delays potentially stretching into 2025, while freight rates may rise due to tighter capacity.
Further Delays
Significant delays could occur for manufacturers that rely heavily on timely deliveries of raw materials. Many manufacturers, operating on tight, on-demand production schedules with little inventory on hand, could run out of essential supplies within two to six weeks of a strike. The disruption could create a “multiplier” effect, where even a few days of port closures result in weeks of manufacturing delays, compounding supply chain issues and leading to potential furloughs, especially for smaller manufacturers.
Import Steel Pipe Increase
Our national network of distribution centers allows us to bring in material from all over the world through ports across the United States, and we are not limited to relying on ports on the East Coast and Gulf Coast. However, even without port disruptions on the West Coast, supply tightening could occur as iron ore and steel-making materials rise in Asia, with China’s demand expected to grow due to new economic stimulus policies. Raw material costs, ocean freight, container demand, and the US port strikes have led to a price increase of approximately $100-$150/TON for Globally Sourced Steel Pipe products. A new list price sheet dated 9/30/24 was released on Monday. You can download this new sheet and enter your multiplier for NET pricing in the Excel version. For your multiplier or additional info, please call your United Pipe representative.
Further Cost Increases
For construction materials like steel products, delays caused by shipments stranded at ports have an immediate impact. The timing is particularly problematic, as these materials are urgently needed for the upcoming winter season in the Northeast and Midwest, as well as for reconstruction efforts in the South following the devastation of Hurricane Helene. Steel, in particular, is in high demand with a tightening supply, and prices could rise further the longer the strike continues.
Rely on United Pipe for Inventory and Weekly Delivery
In volatile times like these, wholesale distributors can rely on our nationwide stock of commodity pipe products. Break bundles and combine copper tube, steel pipe, and PVC pipe in your order to make our low minimum weight for FFA and weekly delivery. Become more competitive and manage your risk on volatile commodity products while turning inventory more quickly. Our business model is designed for low and unpredictable volume scenarios, exactly like the one we are in right now. With us, buy only what you need, when you need it.