With a high probability of port workers on the US East Coast going on strike on October 1, several shipping companies have planned to significantly raise freight rates for routes between the US West Coast and East Coast. They have already filed with the Federal Maritime Commission (FMC) a planned increase of USD 4,000, representing an increase of over 50%.

Regarding the forecast of a potential strike by dockworkers at US East Coast ports on October 1, the head of a super-large freight forwarding company has revealed several key pieces of information. Firstly, the executive noted that on August 22, an Asian shipping company filed with the FMC plans to increase freight rates by USD 4,000 per 40-foot container (FEU) on routes between the US West Coast and East Coast, effective October 1. Based on current freight rates, this increase would result in a roughly 67% hike for routes to the US West Coast and approximately 50% for routes to the East Coast. It is anticipated that other shipping companies will also follow suit by filing for similar or higher rate increases.

Analyzing the potential reasons for this strike, the executive believes that the new contract terms proposed by the International Longshore and Warehouse Union (ILA) in the United States, which demand a USD 5 per hour wage increase annually, would lead to a cumulative straight-line increase of 76% in the maximum wage of dockworkers over six years. This is deemed unacceptable by shipping companies. Additionally, strikes often have an upward pressure on freight rates, hence it is anticipated that the management side will not easily compromise and is not averse to a strike occurring.

Regarding the stance of the US government, the executive predicts that the Biden administration, potentially motivated by a desire to appease labor unions, may lean towards supporting the union's position, thereby increasing the likelihood of an actual strike taking place.

Furthermore, former Chairman of Yang Ming Marine Transport Corporation, Hsieh Chih-chien, has also expressed concerns about the potential strike on the US East Coast, acknowledging the possibility and advising shippers to ship their goods as early as possible to avoid potential risks. However, given the current time constraints, it is no longer practical to avoid shipping on the strike date of October 1.

Hsieh Chih-chien further analyzes that while cargo from Asia to the US East Coast could theoretically be rerouted to the US West Coast and then transported by train, this option is not feasible for cargo originating from Europe, the Mediterranean, South Asia, and other regions. This is because the railway capacity is unable to handle such a large-scale transshipment demand, leading to severe disruptions in the market, which is undesirable for shipping companies.

Hsieh Chih-chien expressed that he expects the American Consumer Union to intervene and mediate, while the Biden administration will also actively step in to resolve the issue in order to stabilize public sentiment and avoid losing votes. Given that the presidential election is set to take place on November 5, it is anticipated that even if a strike occurs, it will not last for an extended period.

Industry insiders in freight forwarding pointed out that since the pandemic in 2020, container shipping companies have reaped significant profits through freight rate hikes, including additional gains from the Red Sea crisis at the end of last year. If a strike does occur on the US East Coast on October 1, shipping companies may once again enter a period of "disaster profits," albeit a short one. However, considering that market freight rates may quickly drop after the strike, shipping companies will still seize the current opportunity to maximize freight rates.