US port strike ends leaving huge cargo backlog to be cleared

Published On Oct 4, 2024, 2:02 AM

The recent strike involving US East Coast and Gulf Coast port workers has ended after a wage deal was reached, resulting in a backlog of cargo that will take time to clear. Shipping stocks in Asia fell due to expectations that freight rates would stabilize now that the strike has concluded. Major retailers like Walmart and IKEA, who heavily rely on these ports, are expected to face delays but the overall economy may benefit from the end of the strike as operations resume. The wage agreement reached included a substantial increase of around 62% over six years.

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Despite the negative short-term impacts on shipping stocks, companies with logistics and supply chain management strengths may see long-term benefits once their operations normalize. Investors might look at related companies that could benefit from an increase in shipping volumes once the backlog decreases.

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