by A1 WorldWide Logistics | Jan 9, 2025 | East Coast Protests, Economic trends, Shipping Logistics
The ILA and USMX reach an agreement nearly a week before the original contract extension expires. In a January 8th, 2025, announcement, the two parties agreed to replace the expiring contract with a tentative 6-year contract. A joint statement stated, “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf Coast ports.” The new deal encompasses an estimated 25,000 workers across 14 port authorities from Boston, Massachusetts, to Texas. However, the contract does not include ILA workers in RORO (roll-on/roll-off) jobs across the locations. This agreement averted a potential second port strike by the ILA that would have severely disrupted international shipping.
Why Was There A Potential Strike?
On October 1st, 2024, the ILA had a strike in East and Gulf Coast ports across the U.S. For over a year, the ILA has been protesting for better employee wages and to stop automation at ports. During the pandemic, the USMX made approximately $400 billion in revenue, which the ILA felt was not paid back. Especially with growing inflation and as the cost of living increases. Another issue has been the introduction of automated equipment at ports, which threatens job security. The ILA believes that the USMX is replacing workers to increase corporate profit. USMX has the opposite belief that automation will create an opportunity for new jobs to maintain the equipment.
After a three-day strike in October, the ILA and USMX agreed to extend the contract. Along with a 61.5% pay increase, the extension included a $4 an-hour wage growth yearly over six years. The original contract ending the October 2024 protests expired on January 15th, 2025. Talks that started on January 7th resulted in a finalized master contract between the parties lasting six years. The new contract benefits ILA and USMX by increasing wages and job security while allowing automation. While the two sides will continue to operate under the current contract, they will meet with the Wage Scale Committee to ratify the final terms of the agreement.
What Will Be The Impact As The ILA and USMX Reach An Agreement?
The most significant impact of the new deal is the potential disruptions that the two parties have avoided. Analysts reported that the October 1st strike resulted in an economic deficit of nearly $5 billion daily. A second strike could further hurt the economy, with port stoppage and congestion causing container buildup. With a financial loss for importers and exporters, customers, ports, and truckers felt the strain. The backlogs of containers would have severely hurt businesses by creating massive delays in supply chains.
Trade groups and businesses positively welcomed the news since it provided certainty and avoided further disruptions. Another effect of the new contract is that shippers may regain the confidence to ship internationally. While moving cargo may seem like an opportunity for your business, shippers must take steps to prevent disruptions. This can include speaking to a logistics provider for assistance to get started. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9752 for a quote for importing into or out of the U.S. We are with you from the start of the shipping process until the goods reach the final destination.
by A1 WorldWide Logistics | Jan 8, 2025 | East Coast Protests, Economic trends, Shipping Logistics
Port labor talks are resuming between employers and dockworkers, with the current contract extension expiring on January 15th. Negotiations between the ILA (International Longshoremen’s Association) and the USMX (United States Maritime Alliance) have stopped since October 2024. The pause was after a strike on October 1st that lasted after three days. A tentative agreement ended the protest by extending the existing contract to January 15th, 2025. The agreement promised an hourly pay increase of 10% in the first year and 62% over the six-year deal. Over the last year, ILA workers have been protesting for higher and against using automation at ports. Specifically, they are fighting for wage hikes like West Coast ILWU dockworkers received in 2022.
During and after the pandemic, international shipping rates surged to incredible amounts. Specific container rates rose from $2,500 to $12,000. From 2020 to 2023, the USMX reportedly made nearly $400 billion. ILA President Harold Daggett noted, “Since COVID, they’re making billions of dollars, but they don’t want to share it.” International shipping companies have already announced container surcharges in the scenario that a strike does occur. They advise customers to retrieve their containers and return empty ones before January 15th. If the parties fail to reach an agreement by the date, associations like the NRF (National Retail Federation) are pushing for another extension.
The Reason Why Port Labor Talks Are Resuming
The reason why negotiations are resuming is to avert a situation similar to October’s port strike. While the October strike only lasted three days, a potentially longer one can have numerous consequences. Analysts approximate that a prolonged strike can result in an economic loss of $0.5 to $5 billion daily. Numerous supply chains rely on the ports, and disruptions can lead to delays and monetary loss. Shippers have already rerouted their shipments to ports away from ports affected by possible protests. The results of the talks are noteworthy, with East and Gulf Coast ports handling significant volumes of U.S. imports.
Automation Is A Primary Concern In The Talks
Although the October 2024 talks ended the strike last year, they did not address the issue of port automation. Automation is a huge concern due to the belief that it threatens the job security of ILA dockworkers. Dennis Daggett, the union’s vice president, stated, “It’s about replacing workers under the guise of progress while maximizing corporate profits.” The ILA also doubts the effectiveness of implementing automated systems and that the cost will outweigh the productive gains. Conversely, the USMX argued that semi-automated cranes are essential for improving efficiency and making U.S. ports competitive globally. Ports in countries like China have increased the volume of cargo movement due to these technologies.
The USMX also believes that automation will create new jobs for handling and maintaining the strategies. President-elect Donald Trump has backed the ILA’s stance against automation, noting that it will hurt American workers. Despite the concern that a potential port strike may cause, it should not stop you from moving your shipment. You should, however, take preventive steps beforehand and be up-to-date with the current situation. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9513 for a quote to move your goods internationally. We find the best action to ensure cargo moves to the final destination.
by A1 WorldWide Logistics | Dec 26, 2024 | East Coast Protests, Economic trends, Shipping Logistics
As the end of the contract extension approaches, seaports in the U.S. can see the ILA strike happening In January. Months of unsuccessful negotiations between the ILA (International Longshoremen’s Association) and the (U.S. Maritime Alliance) resulted in an October strike. The two parties disagreed on wages and the use of automation at ports. Port workers across the East and Gulf Coast began protesting until October 3rd, when they reached a tentative agreement. The agreement was a 61.5% pay raise and a $4 an-hour yearly wage increase for the next six years. USMX also extended the current contract to mid-January. With the January 15th, 2025, extension ending date nearing, it can have numerous implications for domestic and international shipping.
Why Could We See The ILA Strike Happening In January?
The chances of a port strike have increased with President-elect Donald Trump publicly backing the ILA. Trump recently met with the ILA President Harold Daggett and Vice President Dennis Daggett. After the meeting, Trump noted, “the financial benefits of automation are “nowhere near the distress, hurt, and harm the technology creates for workers”. Various components can contribute to a potential strike, including the minimal conversation between the parties. The ILA and USMX haven’t had any significant talks for over a month despite January 15th quickly approaching. Despite this, the ILA’s vice president voiced his displeasure regarding the growing use of automation earlier this month.
Despite the ILA’s disposition to automation, the USMX believes it is essential for moderation. The USMX views automation as necessary for building a more sustainable future for the U.S. maritime industry. They also argue that advanced technology will allow ports to handle more cargo while creating more jobs. Other players in the transportation industry believe that the strike may not happen and that the parties will reach an agreement. Along with Trump’s backing, an extension already includes more excellent pay and a yearly wage increase.
What Does The Strike Mean For The Shipping Industry?
Since the ILA handles approximately half of the U.S.’s ocean shipments, a potential strike can have significant effects. During the October 1st strike, 36 U.S. ports shut down, resulting in an economic loss of $5 billion daily. When a port stoppage happens, it can lead to congestion, which may disrupt numerous supply chains. To mitigate against delays, shippers could reroute their shipments to West Coast ports like the Port of Los Angeles. However, rerouting can have the opposite effect, extending the time it takes to ship the goods and causing congestion. They can also use different methods of conveyance like air or, if possible, land.
When shipping cargo internationally, you must take the appropriate steps to mitigate disruptions. Along with the ways the article lists, this can include being present with any news that may affect your shipment. Shippers have already begun importing cargo early to avoid a potential strike and other scenarios, like a tariff increase. Speaking to a logistics provider can also help find the right step to prevent delays. Contact A1 Worldwide Logistics at 305-440-5156 or info@a1wwl.com to navigate any situation impacting your supply chain. We have freight brokering, customs brokering, warehousing, domestic shipping, and more to guarantee the success of your shipment.
by A1 WorldWide Logistics | Dec 12, 2024 | East Coast Protests, Importing, Supply Chain
The National Retail Federation (NRF) predicts container imports will increase into the new year and could continue into spring. Data from the NRF’s Global Port Tracker, which tracks America’s biggest importers, notes an increase in the near future. In January 2025, the NRF forecasted 2.2 million TEUs (Twenty-Foot Equivalent) more than January 2024. The surge has already been evident, with imports in October 2024 up approximately 9.3% year-over-year. December projections could see a 14.3% TEU import compared to the previous year. As container imports continue to rise, international shipping could have numerous implications. This article will explain why container importations are increasing and the impact it will have on shippers.
What Are Causing Container Imports To Increase?
Various scenarios, such as threats of port strikes and tariff increases, are leading to a rise in container imports. On October 1st, 2024, approximately 45,000 International Longshoremen’s Association (ILA) dockworkers walked out of ports protesting for better contracts. They are also protesting against the use of automation, which threatens job security. Two days later, the strike ended, with the USMX and ILA agreeing to extend contracts until January 15th, 2025. With the extension date nearly a month away, shippers are importing to avoid any potential protests that could arise. The NRF recently urged the ILA and Port employers to continue negotiations, but there was no response.
Another contributor to the container surge is the new tariff imports that the Trump Administration recently announced. When in office, Trump will impose a 25% tariff increase on all goods entering the U.S. from Canada and Mexico, along with an additional 10% tariff on goods coming from China. Shippers import cargo before the inauguration date to avoid an increase in cost. The NRF advocated that the Trump administration should deploy the tariffs more strategically instead of using a broad-based method. Along with increasing taxes, the hikes could result in higher logistic and customer costs. The new tariffs and the potential of a port strike create a sense of urgency for shippers.
How Will Shippers Be Affected By A Rise In Container Imports?
As container imports into the U.S. continue to rise, international shipping can have numerous implications. A higher volume of containers arriving at a port may increase the chances of port congestion, resulting In delays. In turn, this could lead to supply chain disruptions, with delays leading to potential shortages of products. The cost for shippers, carriers, and customers may also rise as the demand for transportation increases. Despite the possible adverse impact of a rise in imports on shippers, it could benefit domestic shipping. Drayage services for picking up containers from ports could soon see a significant increase in volume.
When shipping internationally, it is essential to understand how a rise in imports can impact your shipment. This allows the shipper to take preventive methods to protect their supply chain from disruptions. Another way that an importer or exporter can prepare is by using the help of a 3PL (third-party logistics.) provider. 3PLs handle various parts of a shipper’s supply chain, including customs clearance, shipping storage, and more. They ensure a shipment’s success by assisting you through the journey and providing the best course of action. Call A1 Worldwide Logistics at 305-425-9513 or email us at info@a1wwl.com to learn about our 3PL solutions.
by A1 WorldWide Logistics | Oct 4, 2024 | East Coast Protests, Shipping Logistics, Supply Chain
The ILA port strike ends after days of protests across East and Gulf Coast ports. Since October 1st, nearly 45,000 International Longshoremen’s Association (ILA) dockworkers walked out of ports and protested for better contracts. Their previous six-year contract with the United States Maritime Association (USMX) ended on September 30th with no resolution. Disagreements on wages and use of automation at ports have stalled talks for months. On the days leading up to the deadline, both parties made offers to prevent the strike, but to no success. When the ILA started walking out of their jobs, ports began shutting down. As a result, this significantly impacted the international shipping industry.
On October 3rd, the ILA and USMX reached a tentative agreement to extend the contract until January 15th, 2025. The agreement was a 61.5% pay raise and a $4 an-hour yearly wage increase for the next six years. Despite the ILA’s fight for a 77% wage increase, this is more than the USMX’s previous 50% offer. A final master contract will have to be negotiated by the parties before the extension date. In a statement released by the White House, Biden notes, “I want to applaud the International Longshoremen’s Association and the United States Maritime Alliance for coming together to reopen the East Coast and Gulf ports.”
What Can The Shipping Industry Expect As The ILA Port Strike Ends?
Despite an extension of the contract, the international and domestic shipping industry has already felt the impact of the strike. Once the strike occurred, containerships started piling up at ports without dockworkers there to unload them. As a result, this created congestion that may lead to supply chain delays soon. While the temporary agreement resumed operations, it could take weeks for ports and supply chains to return to normality. To mitigate against delays, shippers rerouted to West Coast ports weeks before the strike occurred. Once ports shut down, importers of perishables like agriculture began fearing food spoilages from delays leading to loss and shortages.
Consumers reacted to the potential shortages by panic buying goods from stores. As the protest ends, the overall monetary loss could be less than anticipated by the shipping industry and the economy. The amount is still significant to the U.S. economy, with analysts reporting that a strike can cause a loss of nearly $5 billion daily. Ports across the East and Gulf Coast have begun opening and resuming operations. North Carolina Ports resumed normal operations at 8 am ET, while Port Houston will reopen at 1 pm CT. The Department of Transportation will work with supply chain stakeholders to ensure an orderly operation for the ports.
Is It Safe To Ship Cargo?
With the protest ending for the time being, shippers may find it safer to move cargo internationally. It is essential to understand that it may take time to clear the complete impact of the strike. When starting, it can be beneficial to use the assistance of a 3PL (Third-Party Logistics) provider. 3PLs help you navigate the world of international shipping by providing services like freight forwarding and customs brokering. They also guide you through the entire process and give you an idea of what to expect. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9752 for assistance with shipping goods in and out of the U.S. We have freight forwarders and customs brokers that ensure the success of your shipment.
by A1 WorldWide Logistics | Oct 3, 2024 | East Coast Protests, Shipping Logistics, Supply Chain
Conflicts between the International Longshoremen’s Association and United States Maritime Alliance are resulting in the East Coast port protest continuing. On midnight, October 1st, ILA dockworkers across East and Gulf Coast ports left work on a strike. Negotiations with the USMX for a new contract have been unsuccessful, and the deadline has passed. The new contract they are fighting for includes fairer wages that reflect the cost of living and less port automation. A push for port automation has been an issue for the ILA since it threatens job security. As the strike continues, the impact on international and domestic shipping and various industries is rapidly growing.
What Is The Impact Of The East Coast Port Protest Continuing?
On Wednesday, 45 container ships were outside east and west coast ports, unable to unload due to port shutdowns. On Sunday, this number was three; however, the 45 vessels could double by the end of the week. The most significant impact of the protests is that global supply chains will feel the disruptions. Some of these goods affected by the strikes are produce products, with the ILA handling nearly 75% of banana imports and 90% of cherries. East and Gulf Coast ports also hold approximately 62% of machinery importers bring. As the backlog of ships continues to rise, delays will have other effects on supply chains, such as scarcity.
Consumers have recently begun buying goods from stores in fear of shortages in the near future. A shortage in everyday products could also cause inflation due to scarcity pushing prices higher. For importers and exporters, shipping costs can increase as shippers look for alternatives for moving their cargo. A popular alternative for moving cargo both domestically and internationally has been rerouting their shipments. This can lead to longer, more costly routes, and the cost goes directly to the customer. While choosing other conveyance has also been an alternative, it has its benefits and drawbacks. For example, switching to air can cut shipping time to a few days but may increase the overall cost.
How Long Could The Strike Continue?
The length of the protest depends on how long the ILA and USMX will take to find a resolution. A strike of one week can cost the U.S. economy over $2 billion, and a strike lasting over three weeks may take until 2025 to clear. Port employers reportedly offered the ILA a 50% wage increase over the next six years; however, they rejected it. The reason is that the union is seeking a contract with a higher yearly wage hike. Although no negotiations are currently in place, the USMX is willing to continue talks. Companies from various industries have been pleading for the Biden administration to intervene.
In response, Biden supported the dockworkers and scolded carrier companies for not paying them fairly. The administration notes that it will not invoke the Taft-Hartley Act to suspend the protests. Due to the severity of the protests, shippers must be up-to-date on the current situation. Importers and exporters should not stop transporting their shipments; however, they should take proper steps to mitigate disruptions. Contact A1 Worldwide Logistics at 305-425-9456 or info@a1wwl for updates and assistance moving your cargo. We educate you on the steps to take while constantly being with you throughout your shipment’s journey.
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