The end of the year is fast approaching, but that doesn’t mean it’s smooth sailing from here on out. In fact, it’s anything but smooth. It’s peak shipping season, the East and Gulf Coast ports just went on strike and it’s Golden Week in China. Keep on reading to find out what’s happening this month on the high seas.
CHINA PORTS
Chinese and Hong Kong ports have been very busy pushing exports out of the country. We’ve encountered our fair share of rolling and delayed schedules this season, but all in all, it’s been a smooth shipping season. Exporters were rushing to get their goods on the water for the holiday season, but also to try to beat the Section 301 China Trade Tariff increases that took effect September 27. If you’re importing Chinese products to the United States, please take a minute to check the HTS Section 301. If you weren’t paying duties on your China imports before, you may be now. Your goods can still be duty-free and accrue the Section 301 tariffs. For the most up-to-date information on HTS Codes and tariffs, reach out to your freight forwarder or visit https://ustr.gov.
National Day in China is on October 1 and kicks off China’s weeklong celebration called Golden Week. Most of China and Hong Kong will be on holiday from Oct. 1 – Oct. 7 to celebrate the founding of the People’s Republic of China. Most seaports and factories will be closed at this time.
US WEST COAST
The ports are hopping with imports on the US west coast. Though busy, the West Coast ports are keeping imports and exports moving along. GPI hasn’t experienced many backups at the ocean ports and goods usually leave port within 3 to 5 days of arriving to continue their journey. We are experiencing backups at the West Coast rail. Goods traveling from the West Coast to Chicago or Michigan are finding delays at the rail. Long queues and rail car shortages are adding a few weeks to your transit times, so be prepared to add some days to your timelines. The West Coast ports are expected to see a significant uptick in import volumes as many importers routed shipments bound for the East Coast via West Coast channels in anticipation of an ILA strike.
US EAST COAST
We’ve been on the edge of our seats for the past four months as the ILA (International Longshoreman Association) union fights for a new contract with the United States Maritime Alliance (USMX). The ILA is fighting for higher wages and protections against further port automation. While the USMX claims to be offering “industry-leading wages”, the ILA disagrees that it is enough. At 12:01 AM on October 1, the ILA officially headed to the picket lines. The USMX has offered the Longshormen a 50% increase in wages, but it’s still not enough. The strike shuts down the entire east and Gulf Coast ports bringing all imports and exports running through these ports to a grinding halt. Just 1 day of strikes is equivalent to 1 week of backups throughout the supply chain. One week of strikes in the middle of peak shipping season could set the supply chain reeling into 2025 so we’re all holding our breath and hoping for a quick resolution and agreement. Buckle up, folks! You can already count on experiencing delays across the country.
TO DIVERT WEST OR STAY THE EAST COAST COURSE
The question on everyone’s mind now is whether to send your newly produced goods to the West Coast instead of East Coast. Both options are highly likely to experience delays. We’ve already been experiencing delays at the west coast rails for the past month and many importers have already begun routing their goods to the west coast. With increasing volumes coming into the West Coast, we’re sure to experience more delays there as well. There’s no easy choice here and it comes down to where you would prefer to see your goods delayed. Shipping west will eventually see your goods on the move, but if the strike ends quickly, they may see shorter delays on the East Coast. There are no definitive answers to this dilemma, so it boils down to where you feel you have the best chance for movement. Reach out to your freight forwarder to ask about options and keep yourself informed on the latest supply chain developments.
AVOIDING FUTURE DELAYS
Although some delays, such as the strike, are unavoidable, most delays can be circumvented with efficient supply chain management. The most important thing you can do is plan your shipping in advance and make setbacks part of your timeline. Factor in at least 2 extra weeks (or more if possible!) to your timeline for unforeseeable delays. It will, at least, give you some wiggle room and, at most, get your goods to their destination ahead of schedule.
The time of year you ship is also a major factor when shipping. Your best pricing and smoothest sailing will be early in the year and off-season, so shipping in January or March will give you the best pricing and transit times. We still have a few months left to ship before the end of the year so now is the time to put the above advice into action. Many factories are off for Christmas / New Year week. You should also start thinking about the upcoming Chinese New Year which rings in the year of the Snake on January 29, 2025. Chinese New Year closes most of the China and Hong Kong workforces throughout the month of February, so plan on shipping your goods in early January or early March!
