12,000 dockworkers in the German ports of Bremerhaven, Wilhelmshaven, and Hamburg are set to go on strike Thursday morning. The strike is set to last from 0600 Thursday morning to 0600 Saturday. This is reportedly Germany’s longest strike in forty years.
Reactions to the Strike
The Central Association of German Seaport Companies (ZDS) negotiator Ulrike Riedel claims, “this action is completely disproportionate in view of this offer and harms not only us, but Germany as a whole.”
The dockworker trade union, ver.di’s Chief Negotiator Maya Schwiegershausen-Güth rebutted, “The employers are not sufficiently meeting our demand for a real inflation compensation.” She went on to add, “We need a real inflation compensation so that the employees in all companies are not left alone with the consequences of galloping price increases.”
The demand is for a 14% increase including bonuses to offset inflation concerns, and the offer on the table from employers is a flat 12.5% over two years.
Impacts Beyond Germany
This shutdown affects more than just Germany. Ocean carriers have quoted concerns that there is nowhere else for them to unload their German cargo, keeping these ships stuck outside the port and contributing to the congestion in the worldwide supply chain.
As it stands, there are already thousands of backlogged containers on the Northern Europe to US trade routes, and these events will only worsen the situation. Additionally, vessels are disrupted with large gaps in regular weekly service. For example, there are gaps with no sailings to Houston from July 21 to Aug 2 from MSC (2M alliance) and none from July 24 to Aug 6 with CMA (Ocean Alliance).
This puts two of the three vessel services to the gulf coast out of service for about two weeks each. Both of these carriers were already overbooked, leaving only one carrier/alliance to shoulder the ever increasing burden.
Vincent Stamer, Head of Kiel Trade Indicator (which estimates trade flows) says, “The situation in the North Sea is not yet leading to dramatic collapses in Germany’s maritime trade, but it is certainly a burden, especially for shipping with Asia. Also because freight rates are likely to remain high as a result.” He went on to say, “There is currently no end in sight to the congestion in container shipping. This is very unusual for the North Sea, while long queues off Shanghai have also been observed in the past, for example.”
The backlog from this confluence of events will take many weeks to resolve, and vessel space will continue to be at a premium. We continue to recommend that customers build additional lead time into their ordering and provide forecasts well in advance to allow time to engineer solutions to keep cargo flowing in this troubled market.
If you have any questions about this or how other developing issues affect your cargo, reach out to your partners at TOC Logistics International.