Possible labor strikes at U.S. East and Gulf coast ports and Canadian railways may lead to volatility in container freight rates by causing supply-chain disruptions for the container industry and cargo owners, according to an industry expert.
“With the looming strikes at Canadian railways and U.S. ports, we may see an immediate uptick in freight rates as market participants brace for significant disruptions,” said Christian Roeloffs, CEO of German online container marketplace Container xChange.
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“The possibility of simultaneous strikes at U.S. ports and Canadian railways present a perfect storm for North American trade.”
Canadian National Railway and Canadian Pacific Kansas City plan to lock out thousands of rail workers on Thursday if they cannot reach labor agreements with the Teamsters Canada Rail Conference, Reuters reported.
The Teamsters issued a 72-hour strike notice on Sunday to CPKC ahead of the company's lockout notice.
Meanwhile, the International Longshoreman Association, which represents 45,000 dockworkers at three dozen U.S. ports, plans to go on strike on Oct. 1 if it does not sign a new labor contract with the U.S. Maritime Alliance by that date.
Price Action: Container leasing and container liner stocks saw gains and losses on Wednesday.
- Triton International Limited (NYSE:TRTN) was down 0.53% to close at $26.18
- Euroseas Ltd. (NASDAQ:ESEA) declined 4.98% to $45.42.
- Global Ship Lease, Inc. (NYSE:GSL) slipped 0.87% to $26.17
- Matson, Inc. (NYSE:MATX) picked up 2.09% to $133.73
- Danaos Corporation (NYSE:DAC) declined 0.90% to $82.36
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