The recent confirmation of a potential strike by the US dockworker union ILA across east and Gulf coast ports is already causing significant disruption, with shippers bracing for increased airfreight costs. Even before the official strike, many businesses have had to pivot their strategies to mitigate the potential impact on their supply chains.
“Containers will be in the wrong spot, and shippers will have to deal with that,” said Niall van de Wouw, chief airfreight officer for Xeneta. “Some have already pulled back freight they had dispatched. So they will need to supplement their stock in a different way or stick it out. Either way, things are going to be a mess; and when there is a mess, airfreight comes in.”
This disruption is already evident. Shipco Transport has reported increased demand for airfreight as businesses look for alternative ways to keep their goods moving. According to Kim Ekstroem, global COO for airfreight at Shipco, “A couple of weeks ago, we started to see quote requests for large shipments that normally would be LCL or even FCL. Forwarders and their customers began bracing themselves for a potential strike. Now, many of these early requests have turned into bookings.”
But the strike isn’t the only factor. The confluence of seasonal trends, such as the typical Q4 ecommerce spike and the airline winter schedule reducing bellyhold cargo capacity by 20%, is adding to the pressure. “It’s a perfect storm,” warns van de Wouw. “Add a strike to an already tense supply chain, and the consequences could be severe.”
This heightened demand for airfreight has already started pushing up prices. “We’ve seen a slight increase in transatlantic air rates,” said Ekstroem, “but the question is, for how much longer?” He cautioned that airfreight rates could jump from $2 per kg to $6 or more within days if capacity continues to tighten.
While some shippers have opted to avoid east and Gulf coast ports altogether, many are turning to airfreight to bypass potential blockages. However, the airfreight market is quickly becoming a battleground where only the best-paying cargo will fly. “When demand and capacity are imbalanced, the market will go into a frenzy,” said Ekstroem. “Airlines will prioritise express or guaranteed products at premium rates, leaving many businesses scrambling for space.”
As capacity diminishes and rates skyrocket, the need for visibility and agility in supply chains has never been more critical. Implementing supply chain visibility software that provides real-time data is key. For BCOs (Beneficial Cargo Owners) and LSPs (Logistics Service Providers), such tools are vital for making fast, data-driven decisions in this volatile environment. By providing insights into port conditions, shipment statuses, and capacity constraints, visibility solutions can help businesses navigate disruptions and ensure critical goods are not delayed or lost in transit.
These disruptions and the looming climate impact make supply chain visibility software indispensable. Real-time data gives businesses the insights they need to not only manage immediate concerns but also optimise long-term resilience, counteract climate impacts, and improve overall sustainability.
As van de Wouw pointed out, with limited options on the ocean and airfreight costs set to soar, only those equipped with the right tools will be able to navigate the complexities of the coming months. The storm is brewing—businesses need to be ready.