Key Takeaways:
The agreement between the USMX (United States Maritime Alliance) and the ILA (International Longshoreman's Union) ends on Sept. 30th, which could mean work stoppages starting on October 1.
ILA represents 25,000 workers across 36 ports on the US East Coast and Gulf Coast - a work stoppage of any duration will take multiple days to clear and could affect hundreds of inbound container ships.
Our advice:
If there is cargo in transit with an expected arrival date beyond September 20th or yet to get on a vessel - try to divert or schedule to a West Coast port, if possible.
Overland transport costs will need to be compared with the aspect of minimal delays & reliability if this route is taken.
For cargo that cannot be diverted from an East Coast or Gulf port, be willing to be patient and make alternate plans with your project management in case goods are heavily delayed, such as retaining existing case goods as needed.
If cargo is headed to an East or Gulf Coast port, and will arrive at its destination port before the final week of September – you should be able to stay with your original booking with confidence.
However, be wary of increased congestion at the local terminals as shippers race to get their product picked up ahead of the deadline.
Remember, it can take multiple days to pull a container from a local terminal even with normal scheduling, and customs clearance is always a factor.
It is now September, which means the current six-year agreement between the ILA and the USMX is that much closer to expiration on September 30. Without a new agreement in place by that date, it is expected that we could see a work stoppage at ocean container ports across the East & Gulf Coasts. As we have seen recently in Canadian News, work stoppages can change quickly and no work stoppage is the same.
Two days of talks began yesterday, Wednesday Sept. 5, between ILA members to discuss "...demands and prepare for a potential strike on Oct. 1." Formal dialogue between the ILA and USMX has been at a minimum since the negotiations stalled in Mid-June. The results of the union’s meetings this week could offer more insight into the ILA's position and strategy for a potential strike. Both the ILA and USMX have filed for a mediator/arbitrator with the Federal Mediation & Conciliation Service in Mid-August.
"After the ports of Los Angeles and Long Beach, the next five busiest ports in the U.S. are New York/New Jersey, Savannah, Houston, Virginia and Charleston. All are covered by the ILA/USMX labor contract." reports the Supply Chain Management Review. 43% of U.S. imports going through the East and Gulf Coasts means that many retailers, suppliers, and shippers are all watching this situation very closely and making plans accordingly.
What impacts are we bracing for? Mostly related congestion and delays to inbound and outbound ocean container traffic. A work stoppage of any duration will result in backups that will take time to clear, with many estimates putting one day of strikes taking five days to clear. A week of work stoppage could mean a month - or more - of delays as we head into the holiday season.
Many folks are eyeing West Coast ports as considerable alternatives. However, U.S. West Coast ports have already proven to be extremely busy, as we reported in our September Port Report. July 2024 was the 3rd busiest month for imports to date, and the West Coast ports have jumped up to a yearly high for the US Import Load Share. Additionally, there have already been reports of rail congestion coming out of Long Beach, likely impacted by the Canadian Rail stoppage in Late August.
Project teams will need to balance the potential for localized delays and overland transport costs when shipping to a West Coast Port, compared with the possibility of a strike with exponential & systemic delays on the East Coast.
We will continue to keep our eye on this story and provide updates as the situation evolves. Please speak with your Freight Project Manager should you have any concerns, to discuss potential impacts on your specific project, and what other options might be available.