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East Coast and Gulf Coast Port Strikes Threat Assessment

October 21, 2024 | TLP: CLEAR

Healthcare Ready is MONITORING for this event. We are monitoring potential concerns for supply chain disruptions and impacts on healthcare services on our Alert Hub.

Contents

• Situation Overview
• Potential Impacts to Supply Chain

Situation Overview

• As of October 1, East Coast and Gulf Coast port workers are officially on strike after a new labor contract was not reached between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX). 
• As of October 1, the Department of Health and Human Services (HHS) stated that their preliminary assessments indicate impacts across a multitude of sectors including the healthcare sector - although impacts should be limited.
  • HHS, FDA, and ASPR have had discussions with industry stakeholders to limit impacts on consumers and assess any vulnerabilities within the healthcare supply chain to mitigate impacts on potential shortages of lifesaving products.
• The International Longshoremen’s Association (ILA) represents around 85,000 longshoremen workers across ports on the Atlantic and Gulf Coasts, Great Lakes, major US rivers, Puerto Rico, and the Bahamas. This includes some of the major ports such as New York/New Jersey, Charleston, Houston, and Savannah.

Potential Impacts to Supply Chain

• The East Coast and Gulf Coast ports handle roughly 51% of US imports across multiple sectors including pharmaceuticals and medical supplies.
  • The ports of Savannah, Philadelphia, Miami, Virginia (Hampton Roads) and Charleston are critical for the import of pharmaceutical products, essential medical supplies, and medical devices
  • A prolonged strike could severely impact the healthcare supply chain and exacerbate situations in Florida, Georgia, and the Carolinas in the aftermath of Hurricane Helene.
  • Additional products from Europe, Latin America, India, and other countries that rely on sea freight routed across the Atlantic would be heavily impacted.
• A one-day strike could create a backlog of four to six days, and a prolonged strike may lead to port congestion that wouldn’t be resolved through late 2024 and potentially into 2025.
  • Each day the strike goes on, it could cost the US economy up to $5 billion a day.
• The Port of Long Beach is prepared and equipped to handle cargo diversions to the West Coast port in the event that the East Coast and Gulf Coast ports strike on October 1.
  • Additionally, the Port of Los Angeles is prepared to handle any cargo diversions to the West Coast. In August, they already reported a 16% increase in volume.
  • However, longer routes, fuel costs, and an increased demand at the West Coast ports could raise the cost of shipping. 

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