Konecranes CEO: Digitalisation and automation over time is a given
NewsAutomation, central to ongoing discussions between the ILA and USMX, is viewed by Konecranes’ CEO as the way forward for port equipment.
Even though short-lived, the ILA port strike is expected to result in a capacity decline of 10-17% for Asia exporters.
The long-feared strike at US East Coast ports, which began on October 1, ended after three days with International Longshoremen’s Association (ILA) members returning to work on October 4 under a tentative agreement. The agreement extends the Master Contract until January 15, 2025, giving the union and the employers’ alliance time to resolve the remaining issues at the bargaining table. However, given the complexity of the negotiations especially with regard to the ILA’s requests regarding port automation, there is uncertainty over potential future disruptions.
Despite its short duration, the strike has had an impact, with vessels queuing during the stoppage. According to Sea-Intelligence, a Copenhagen-based maritime analysis firm, this could negatively affect capacity availability in origin regions.
“In the most optimistic view, the impact is limited to the three days of striking, but realistically, as it will take some time to clear the backlog of vessels and containers, the impact is likely to be closer to a week of capacity loss,” Alan Murphy, CEO, Sea–Intelligence, said.
The graph on the right from Sea-Intelligence shows the anticipated relative capacity loss for Asian exporters, where a 3-day and a 1-week impact, are compared against a baseline scenario where there is no strike. The figure shows a -17 % drop in capacity offered from Asia to US East Coast in week 46 (Nov 11-17), if the impact is limited to the minimum of vessels being stuck in the US East Coast for just 3 days, while if it takes a full week to get the vessel backlog cleared, then this is closer to a -40% capacity loss for a short period. Similarly, for North Europe to US East Coast, exporters should prepare for a capacity reduction of -14% in week 44 (Oct 28-Nov 3 2024), rising to -30% if clearing of the congestion takes a full week. On the Mediterranean to the US East Coast, a 3-day impact leads to a -10% capacity loss in week 43 (Oct 21-27), increasing to -25% for a week-long impact.
Murphy believes that the shipping lines will not take action to mitigate this capacity shortfall.
“To do so, would require speeding up the vessels quite substantially – especially on the shorter Transatlantic trades – and this would be in a market environment, where the ending of the strike, would likely mean a continuation of the rate declines we have seen recently. Exporters, especially in Asia, North Europe, and the Mediterranean, should therefore prepare for a temporary, short-term crunch in capacity,” Murphy added.
Even though only brief, the ILA port strike also had an impact on container terminals in Panama. Speaking to WorldCargo News at the TOC conference in Panama, which was held over the same week as the port strike took place, Max Florez Arias, General Director of Ports and Maritime Ancillary Industries at the Panama Maritime Authority, said Panama’s container terminals on the Pacific side had seen a spike in yard inventory levels.
There is not a lot of room for terminals to manoeuvre, however, as yard inventory levels were already high at most facilitates. As for vessels coming across the Pacific from Asia, carriers had enough notice of the strike to make contingency plans. On 3 October Arias said that vessels departing Asia for the US Gulf and East coasts were sailing very slowly to Panama as carriers waited to see how the strike would unfold. At that point, Panama did not have a large backlog of vessels waiting at anchorage.
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