Port strike: Buttigieg watching for any price-gouging; UP, BNSF handling volume shift to West Coast

U.S. Transportation Secretary Pete Buttigieg has called on ocean carriers to withdraw surcharges and is monitoring to ensure that ocean shippers and other companies do not opportunistically raise prices, including ocean shippers or others, during the labor dispute at East Coast and Gulf Coast ports.

Buttigieg issued the statement yesterday, after tens of thousands of dockworkers represented by the International Longshoremen's Association union went on strike at ports from Maine to Texas. 

"No one should exploit a disruption for profit, especially at a time when whole regions of the country are recovering from Hurricane Helene," Buttigieg said in a prepared statement. "The Federal Maritime Commission has stated that it will use the authority the president called for and signed into law to ensure any fees assessed are legitimate and lawful. President Biden has directed our administration to use every authority at the federal level and to support state and local officials as they use the authorities at their disposal."

Administration officials are monitoring potential supply-chain impacts and assessing ways to address potential impacts, if necessary, the secretary added.

Meanwhile, Union Pacific Railroad is "prepared for and already successfully handling" volume shifts resulting from the port strike, UP President CEO Jim Vena said in a Sept. 30 letter to Surface Transportation Board Chairman Robert Primus.

Last week, Primus wrote to UP and BNSF Railway Co. to find out how the Class Is were prepared for a potential strike and volumes shifting from the East and Gulf coasts to West Coast ports.

"We keep a buffer of resources to handle the ebbs and flows of our business, which has allowed us to recover quickly from severe weather and natural disasters, maintain fluidity during the recent Canadian rail work stoppage, and continue to improve the service we sold our customers," Vena wrote.

Vena added: "This approach also is enabling us to successfully handle the increased traffic we are seeing in 2024, with international volumes up more than 20% year to date. Additionally, we are successfully navigating recent shifts as shippers divert traffic to the West Coast in anticipation of a strike – in September alone, our year-over-year volumes are up over 40%. We expect some of these shifts to continue, and we are well-positioned to support it." 

In her response to Primus, BNSF President and CEO Katie Farmer wrote that volume shifts to the West Coast began several weeks before the strike date.

"The Port of Long Beach had the busiest month in its history this past August, with volumes increasing by 34% from August 2023, and the Port of Los Angeles reported an 18% increase in volume from August 2023," Farmer wrote. "For BNSF, the first half of 2024 is a half-year record for on-dock volumes and is the fastest we’ve reached one million lifts at on-dock terminals within a year."

Farmer's entire letter to Primus can be read here; Vena's letter can be read here.