Laying it on a bit thick: how 'lines are cashing in on stevedores' just demands'

Photo: © Vladwitty | Dreamstime.com

A massive port strike has broken out on the US east and Gulf coasts, and with it has come an almighty avalanche of hyperbolic misinformation.

Let’s take the juiciest first: yesterday’s claim by ILA president Harold Daggett that carriers were now charging shippers $30,000 per container.

At the risk of being accused of taking things out of context, here’s the full quote: “The shippers [he means carriers] are gouging their customers that results in increased costs to American consumers. They are now charging $30,000 for a full container, a whopping increase from $6,000 per container just a few weeks ago. In just a short time, they went from 6K, to 18K, then 24K and now $30,000. It’s unheard of and they are doubling their $30,000 fee, stuffing the same container from multiple shippers. They are killing the customers.”

If – and “if” is at times the biggest word in the English language – Mr Daggett is referring to freight rates, then it’s “unheard of” precisely because it never happened. There is no evidence on any publicly available spot rate index, nor any of the anecdotal evidence regularly supplied to The Loadstar from industry sources, that rates have ever reached that height.

However, plenty of US news providers have happily run these numbers over the past 24 hours.

Just for the record – the latest World Container Index (WCI) reading from Drewry last week for its Shanghai-New York leg stood at $6,028 per 40ft, while the Rotterdam-New York leg stood at $2,067 per 40ft.

Undeterred by numerical reality, Mr Daggett doubles down in the very next sentence, literally, with the assertion that carriers are actually filling the same container with two shippers’ shipments. $60,000 for a single box? Notwithstanding the fact that at that rate a single box could pretty much cover a vessel’s daily charter cost, the claim defies the laws of physics. There is only a certain amount of space in a container and, in any case, since when have carriers undertaken the role of stuffing containers? Have they suddenly got into the LCL consolidation business? (The answer to that is no, by the way.)

It is impossible to challenge the ILA on these figures, because the union refuses to interact with the media. Fine – totally their prerogative. In the recent video message recorded by Harold Daggett and his son, ILA VP Dennis Daggett, the latter explained their mistrust of the media – largely, we assume, he refers to the US public media – was based on the misinterpretations of the ILA’s wage demands and the American public being fed a distorted understanding of the work stevedores undertake and their importance to the economy.

Again, that’s fine – but then don’t do the very same thing yourself, with freight rates.

And whether that means the stevedores deserve a 70%+ pay rise is an entirely different question.

Ironically, an extended period of industrial action is likely to send freight rates soaring, as previously reported by The Loadstar, and there is an outside chance of Mr Daggett’s Snr’s words becoming a self-fulfilling prophesy.

The billions of dollars of liner profits that so enrage Mr Daggett – is he, well, jealous? – could get even fatter as a direct result of the strike: the extra costs of anchoring ships outside ports will be passed to cargo owners, while possibly months of congestion and supply chain snafus only really seem to earn carriers and terminals even more money, as the pandemic illustrated.