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Portside Challenges: Navigating the Looming ILA Strikes & Rising Congestion

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have maintained 10 successful master contracts since USMX’s formation in 1997. Notably, the ILA has avoided a work stoppage since its last strike in 1977.

However, with the current master contract set to expire on September 30, 2024, the ILA is prepared to halt work starting October 1 if their demands are not met. Since June 2024, the ILA has raised concerns that employers are increasingly relying on technology instead of union labour, which they argue violates their contract with USMX. This disagreement has spurred renegotiation talks for a new contract.

Unfortunately, it would appear negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have made little progress, with less than two weeks remaining before the current contract expires. As the risk of a work stoppage looms, the potential for widespread disruptions and congestion across the U.S. supply chain grows.

Adding to the uncertainty, a recent report from Reuters revealed that the White House has no plans to invoke the Taft-Hartley Act to prevent the strike. This increases the likelihood of a prolonged disruption if the two sides fail to reach an agreement soon.

The ILA is seeking:

  • Wage increases, reportedly targeting an 80% rise over the next five years.
  • Preservation of existing technology provisions, with a firm stance against new port or terminal automation.
  • Premier healthcare benefits.
  • Higher employer contributions to retirement plans.

If an agreement isn’t reached, the strike could inflict a multi-billion dollar blow on retailers and manufacturers, affecting operations at 13 major East and Gulf Coast ports. Given the timing, this disruption could also jeopardise holiday shipments.

Further compounding the situation, congestion at West Coast ports continues to worsen. If East Coast ports experience a strike, the strain could become even more severe. Current Intermodal Port Infrastructure (IPI) dwell times are as follows:

  • LAX/LGB: 8-10 days across all ocean carriers.
  • Seattle & Tacoma: 10 days due to a rise in import shifts from Canadian ports.
  • Vancouver & Prince Rupert (VAN & PRR): 9-day delays following the August 22 TCRC rail lockout, which halted operations with Canada.

If no resolution is reached, carriers have announced plans to implement an LCL emergency congestion surcharge of USD 22.00 per w/m on all shipments departing from U.S. ports starting October 1, 2024. Additionally, both import and export cargo are likely to incur extra costs due to the labour dispute, and these expenses will need to be passed on if they arise.

As always, Specific Freight remains dedicated to providing critical updates to our customers and industry partners. We will continue to monitor the evolving situation and share developments as they arise.

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