Shipping Stocks Tumble After U.S. Port Workers Agree to End Strike

By Adria Calatayud

Shares in container-shipping operators A.P. Moeller-Maersk and Hapag-Lloyd fell sharply after U.S. dockworkers agreed to end a three-day strike, removing the prospect of an earnings boost from higher freight rates.

The agreement between workers and port operators put an end to a strike that had closed container ports from Maine to Texas, threatening to jam terminals, put a swath of U.S. trade at risk and send freight rates higher.

The International Longshoremen's Association and port operators said the deal would extend the prior contract, which expired at the start of this week, through Jan. 15, 2025.

Hapag-Lloyd's shares fell 12% in European morning trade and Maersk's stock fell 7.3%.

In Asia, shipping stocks fell as well after the end of the U.S. strike dashed hopes for higher freight rates as a result of limited supply. Taiwan's Yang Ming Marine Transport and Japan's Nippon Yusen both closed 9% lower, while China's Cosco Shipping fell about 8%.

Maersk this week said the strike would affect supply chains, leading to delays in cargo movement, increased costs, and logistical challenges for businesses relying on U.S. East Coast and Gulf ports.

Investors and analysts had been watching the U.S. port strike for potential effects on freight rates and shipping operators' earnings, pointing to the length of the stoppage as the key factor.

Before Thursday's agreement, analysts at Citi had estimated in a research note that a month-long U.S. port shutdown would likely have a minimal impact on freight rates.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

October 04, 2024 04:48 ET (08:48 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.