How long will it take for the supply chain to return to normal after the dockworkers' strike?

Unionized dockworkers East and Gulf Coast ports on Thursday night suspended their strike until mid-January, but it will take some time for affected ports to return to their normal operations due to the backlog that accumulated during the strike.

The International Longshoremen's Association (ILA) and its nearly 45,000 dockworkers were on strike for nearly three days before reaching a tentative agreement with the US Maritime Alliance (USMX), which represents port employers. The deal, which must be approved by both sides before Jan. 15, will see dockworkers' pay increase by 62% in the new deal, although the two sides must negotiate issues related to automation.

By the time negotiations are over, port operators and dockworkers will begin the process of dealing with the impact of the strike Eastern and Gulf Coast ports As they deal with backlogged cargoes – which will take weeks before the supply chain normalizes.

“More or less, we're seeing it as a 1-to-5 factor ratio, so for every one day of shutdown it takes five days to recover,” said Douglas Kent, EVP chain management of corporate and strategic alliances at the Association for Supply Chain Management (ASCM). , told Fox Business in an interview before the strike.

Dockworkers union reaches tentative deal, suspending port strike until January

Kent offloading delay explained Inbound cargo creates a ripple effect that “moves down the chain and their interconnections—those producing the products, those shipping and handling them, those storing the products and warehouse availability.”

“When it comes to the port, it's a multimodal transfer… It comes to the port, but then it has to go on rail and truck,” Kent explained. “When that activity is interrupted on the arrival side and our ability to clean those shipping vessels and unload those containers, it's a knock-on effect, 'Well, I cleaned it here, but my trucks are sitting here,' or 'I The staff is ready from AsiaBut my containers are all sitting in the backlog in the US.'”

“So a five-day recovery cycle and its knock-on effect, of things not being in the right place at the right time, is a reality. And the intensity increases over time,” he added. “There are so many interconnected players in that ecosystem that aren't connected together, it's very difficult to re-plan for those impacts.”

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The East and Gulf Coast port strike affected 36 seaports staffed by ILA dockworkers. (Photo by Kevin Dyche/Getty Images/Getty Images

Everstream Analytics offers a similar analysis Impact of strikes on supply chain And wrote that, “Each day of strike requires about 1 week to clear the backlog, a 3-day all-out strike would probably take [a] It will take at least three weeks for US ports to return to normal operations.”

Everstream noted that the number of container ships waiting outside East and Gulf Coast ports fell from a high of 59 overnight to 54 as of Friday morning, as vessels began moving from anchorage areas to ports. Reopening of container terminals.

Eastern and Gulf Coast ports will spend the next few weeks handling shipments after dockworkers strike. (Photo by Spencer Platt/Getty Images/Getty Images)

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It also added that some shippers who are outside the United States at other ports, such as the Bahamas, will face the challenge of retrieving those containers.