by A1 WorldWide Logistics | Oct 1, 2024 | East Coast Protests, Economic trends, Shipping Logistics
After months of failed negotiations, the ending of a contract has resulted in the ILA port strike beginning. International Longshoreman Association (ILA) dockworkers have begun protesting across East and Gulf Coast ports. Their six-year contract with the United States Maritime Alliance (USMX) ended on September 30th. The last time this happened with the ILA was in 1977, when workers walked off ports for seven weeks. With the size of the ILA, the strike will have numerous effects on global trade.
How Did This Port Strike Come To Be?
On May 13th, 2024, the ILA and USMX said they would negotiate a new contract in a few days. In particular, the ILA is fighting for a 32% hike in wage increase, similar to the ILWU in 2022. The ILA is also protesting for higher pensions and against using automation at ports. In a video the ILA released on September 4th, President Harold Daggett said, “Mark my words, we’ll shut them down.” In response to the video, the USMX gave an update on whether they were satisfied with their new contract offer. The USMX noted in that update that they would continue negotiations with the ILA if possible.
The Biden Administration noted that it would not intervene in the negotiations and use the Taft-Harley Act, causing a cool-off period. Various agricultural groups urged the white house, ILA, and USMX to continue talks. However, it was not successful. Currently, major ports across the East and Gulf Coast are shut down by the strike. At Port Houston, nearly 50 workers started picketing around midnight with signs saying, “No Work Without A Fair Contract.”
What Does The ILA Port Strike Beginning Mean For International Shipping?
The ILA is a union with thousands of workers across 36 East and Gulf Coast ports. They handle nearly half of the U.S.’s ocean shipments. Due to its size, the strike has significant implications for the international shipping industry. One of the pronounced impacts is that a strike could delay global shipments for imports and exports. Port shutdowns could cause a backlog of vessels not being unloaded, leading to congestion. Weeks before the strike, shippers rerouted cargo to West Coast ports like the Port of Long Beach. That may also lead to delays in the near future as the cargo volume rises.
Analysis reports that the strike can cost the U.S. economy nearly $5 billion daily. Another impact of a strike is that goods become scarce due to delays. The effect of scarcer imports can lead to price hikes for various products like foods and electronics. With the holiday season nearing, prices for limited goods could rise further. Extra costs will also come from added expenditures from international shipping and trucking companies.
Some industries affected by the walkout include retailing, manufacturing, construction, and farming. While a port protest can seem daunting, it should not stop you from transporting your cargo. However, Shippers should be prepared and understand what they can expect when shipping internationally. You can do this by constantly checking news and website sources and contacting logistics providers. To stay updated on the ILA strike and determine the appropriate steps, contact A1 Worldwide Logistics at info@a1wwl.com or 305-440-5156. We understand the importance of your cargo’s movement and find the best solutions for your supply chain.
by A1 WorldWide Logistics | Sep 30, 2024 | East Coast Protests, Economic trends, Shipping Logistics
A port strike is imminent at midnight September 30th with International Longshoremen Association (ILA) dockworkers. The ILA has been in talks with the United States Maritime Alliance (USMX) over a new contract. This contract includes higher wages and limits the use of automated technology at ports. These efforts have been unsuccessful and have stopped with the current six-year agreement, which will soon expire. A potential strike would shut ports along the East and Gulf Coasts, severely disrupting domestic and international trade. This could trigger a ripple effect across the U.S. economy, as many supply chains rely heavily on these ports. With the U.S. import industry valued in the trillions, a strike may significantly impact international shipping.
What Can This Mean For Shipping?
Along with shutting down East and Gulf Coast ports, a strike could cause delays in numerous supply chains. This is because East and Gulf Coast ports are responsible for nearly 43% of all U.S. imports. Delays can lead to monetary loss and look unfavorable for importers that have customers. In addition to delays, shipping costs are likely to surge. Port closures often lead to higher freight rates due to constrained capacity, demurrage, and detention fees. Some shippers have already begun rerouting to West Coast ports, though this solution risks overburdening those ports, creating new delays. Shippers are also exploring alternatives like land and air, though they could raise costs even further.
Industries such as retail and manufacturing have been calling for both parties to resolve, hoping to avoid a multibillion-dollar disruption. With the holiday season approaching, many companies have preemptively shifted goods or brought in products early to avoid shortages. Retailers fear that shelves may not be fully stocked for the holidays. Manufacturers risk production slowdowns if carriers don’t deliver critical materials. Other industries, like construction, automotive, and farming, will also feel the impact of a strike on their supply chains.
Since A Port Strike Is Imminent, How Can You Prepare?
Due to the impact of a strike, it is essential to take steps to prepare for what may occur. An option is to delay shipments until the strike ends. Freight leaving its origin after September 20th will likely be affected, so rerouting to West Coast ports could be the best solution for goods in route. However, it’s important to note that West Coast ports are already congested, meaning longer transit times may occur. Alternative conveyance methods, such as land or air transport, could help ensure timely delivery for high-priority shipments. Ports across the U.S. East and Gulf Coast have already been preparing for a potential strike in various ways. Some of the ways include extending gate hours for trucks before the strike occurs.
As the strike deadline nears, staying informed is vital, and you can do this by regularly checking news updates. Another effective strategy is working with a freight forwarder. Forwarders ensure the transport of your cargo efficiently and safely while minimizing costs. They also provide valuable guidance, helping you navigate disruptions and choose the best shipment plan. A1 Worldwide Logistics offers freight forwarding services and a range of solutions to handle the effects of a potential strike. Contact us at 305-425-9513 or info@a1wwl.com for assistance with your imports and exports.
by A1 WorldWide Logistics | Sep 27, 2024 | East Coast Protests, Economic trends, Shipping Logistics
A potential labor strike on October 1st has ports preparing for ILA protests across the East and Gulf coasts. International Longshoreman’s Association (ILA) dockworkers are planning on walking due to unsuccessful negotiations with the United States Maritime Alliance (USMX). In particular, the ILA is protesting for higher wages and more robust pensions and against automation usage. A strike can significantly impact U.S. supply chains, with over 40% of imports going through East and Gulf Coast ports. Analysts predict it can cost the U.S. economy nearly $5 billion a day and create backlogs from congestion. With the strike potentially impacting domestic and international shipping, ports are preparing in various ways.
How Are Ports Preparing For ILA Protests?
Ports across the U.S. East and Gulf Coast are preparing for a potential strike in various ways. Some of the contingency plans for the nation’s busiest Ports include:
Port of Savannah – To enable cargo movement before the October 1st deadline, the port will allow extended weekend gate hours. The port will also receive exports and refer cargo until September 30th. Port Authority will not be responsible for freight damages that could happen during a strike.
Port Houston – If a strike happens, the Bayport Container Terminal and Barbours Cut Container Terminal will close all container handling operations. Despite the closure, the terminals will receive export cargo through September 30th until 7 pm CT. Operations at the general cargo/multipurpose facilities (Terminal Basin Terminal) will continue during potential work stoppage.
Port of Virginia – The Port of Virginia announced that it would halt operations on September 30th for Virginia International Gateway and Norfolk International Terminal if a strike occurs. In a recent update, officials revealed they will extend gate hours for trucks on September 28th and 29th. The port also informed shippers to speak to their ocean carrier to confirm their free-time policy.
Ports Revealing Further Contingency Plans
Port of New York and New Jersey – The port will allow weekend access to APM Terminals and Port Newark Container Terminal for processing cargo. Most terminals will also have extended gate hours. Currently, the port is processing as many vessels as possible to allow a smooth shutdown without disruptions.
Jacksonville Port – 172 port employees are not ILA members, meaning the main functions will continue during regular operating hours. However, the diversified trade lanes mean a protest could impact one-third of businesses.
South Carolina Port – The Port Authority plans to expand gate hours based on cargo demand. If the South Carolina Port stops operations, the port will not charge container storage fees. A significant focus will be on yard equipment availability and full staffing before the strike date occurs. The port’s SMART Pool chassis system will also have additional inventory.
With a protest quickly approaching, a shipper should understand the effect that it can have on their shipment. Along with monetary loss, it can mean massive disruptions and delays for their supply chains. Brokers assist with the clearance of imports by ensuring that it complies with customs rules and regulations. They give shippers an idea of what to expect and the best action. Talking to a customs broker can be ideal when bringing cargo during a disruption. Contact A1 Worldwide Logistics at info@a1wwl.com or 305-440-5156 to speak to a customs broker regarding your import. We are familiar with importing through East and Gulf Coast ports and can navigate your shipment through any disruptions.
by A1 WorldWide Logistics | Sep 25, 2024 | East Coast Protests, Supply Chain
Finding solutions for navigating a port strike is becoming increasingly essential, with a coastwide ILA protest nearly a week away. The International Longshoremen’s Association (ILA) plans to strike on October 1st when their six-year contract ends. Talks with the United States Maritime Association (USMX) about new contracts have stopped, and the deadline is quickly approaching. Supply chains that import into East and Gulf Coast ports may soon feel disruptions from port shutdowns. Over 43% of all imports into the U.S. go through these ports, resulting in billions in revenue. This article will explain some ways to mitigate the effects of a potential strike.
What is the Impact of a Coastwide Strike?
The ILA is a union of over 65,000 members handling cargo at nearly 40 East and Gulf Coast ports. With the size of the ILA, a protest can bring more than half of U.S. port operations into pause. A supply chain analyst notes that ports may not clear a two-week strike until 2025. Key industries that the strike will significantly impact include manufacturing, agriculture, retail, energy, and petrochemicals. In particular, a complete shutdown of ports will lead to delays for import and export shipments. Once a carrier enters a port, it could stay days at the dock, not being unloaded by workers. Shippers have already begun rerouting their cargo to West Coast ports to avoid potential slowdowns.
Rerouting to West Coast ports may also lead to longer transport shipper transport times and higher costs. Another impact of an international strike is that fees for international shipping can drastically increase. These expenses include capacity costs, per diem, storage, demurrage chassis, pre-pull, etc. Shippers, carriers, and clients feel the effects of a port strike. For example, clients can view carriers negatively if they have to increase costs and reroute shipments. With the amount of revenue the U.S. generates from exports and imports, a strike could cause extensive economic damage.
The Best Solutions for Navigating A Port Strike
Due to the substantial effect of a potential strike, finding solutions for protecting your cargo is critical. This can mean delaying the shipment until the protest is over. Freight leaving from a port of origin after September 20th will likely be affected by the strike. For goods that are already in transit, redirecting to West Coast ports may be the best solution. It is crucial to understand that West Coast ports are already at high volumes due to the number of shippers rerouting, so you may experience higher transit times. Using other methods of conveyance, like shipping by land or air, can be beneficial for crucial shipments.
With the strike approaching quickly, shippers must be current by constantly checking the news. Another way to protect your cargo is by shipping with the assistance of a freight forwarder. Forwarders ensure the transport of your goods in the most effective, safest, and cost-effective way. They educate the shipper on what to expect and find the best action for your cargo’s transport. A1 Worldwide Logistics has freight forwarders, along with an extensive number of solutions for navigating a potential strike. Speak to us at 305-425-9513 or info@a1wwl.com for assistance importing or exporting in and out of the U.S.
by A1 WorldWide Logistics | Sep 20, 2024 | East Coast Protests, Economic trends, Shipping Logistics
Hapag-Lloyd and CMA CGM announced new charges as strike nears on U.S. East and Gulf Coast ports. The International Longshoreman Association (ILA) plans to protest on October 1st as their six-year contract ends. Unresolved negotiations with the United States Maritime Association (USMX) regarding automation, wage increases, and higher pensions are causing the protest. ILA president Harold Daggett said in an ILA-released video over a week ago, “Mark my words, we’ll shut them down.” The Biden Administration said it will not intervene and invoke the Taft-Hartley Act for a cool-off period. As a result of the strike, two top container lines revealed new surcharges effective mid-October.
Starting October 11th, CMA CGM will charge an extra $1,500 per TEU importing to East and West Coast ports. CMA CGM will also impose a surcharge of $800 per twenty-footer, $1,000 per forty-footer, and $1,266 per forty-foot container for dry and tank exports from the ports. Reefer export surcharges will be $1,000 per twenty-footer and $1,500 per forty-foot container. CMA CGM will also apply a $500 per rate restoration initiative on transatlantic shipments beginning October 1st. Hapag-Lloyd has announced a Work Disruption Surcharge (WDS) starting October 18th. The WDS will be $1,000 per TEU for imports into the U.S. East and West Coast ports from:
- North Europe
- Latin America
- The Middle East
- The Indian Subcontinent
- North Europe
- The Mediterranean
- Africa
Why Are Container Lines Announcing New Surcharges As Strike Nears?
The new surcharges are due to the effect a potential protest can have on the industry. East and Gulf Coast ports handle approximately 55.5% of year-to-date U.S. container imports, accounting for 8% of container volume globally. Containers going to the East and West Coast ports will particularly feel the impact of port closures. Port closures for one week could take six to eight weeks to recover from. Container lines are adding extra surcharges to protect against the probable scarcity in the market. Vessels arriving at East and Gulf Coast ports after October 1st will get stuck for weeks, resulting in limited capacity.
Florida International Terminal Introducing Contingency Plan Due To Strike
Along with the new surcharges, the East and Gulf Coast terminals are implementing emergency strategies due to the strike. Port Everglades, Florida International Terminal (FIT) announced a contingency plan for port operations including:
- Vessel Operations – All vessel operations will stop at 6:00 pm on Monday, September 30th
- Refrigerated Cargo – The terminal will not be liable for any refrigerated containers remaining during the protests. Fit also recommends picking up reefer containers before 4:00 pm on September 30th.
- Export Cargo – In the week of October 1st, the terminal will accept not except export cargo for vessel scheduling.
- Gate Operations – Gate operations will continue operating seven days a week during the strike.
- Demurrage – Containers in demurrage during the ILA protests will remain in demurrage, and containers in free time will stay in free time.
With the potential strike having significant implications for international and domestic shipping, shippers must be ready for what’s to come. This can mean constantly being informed of the situation by checking the news and planning. Contacting a third-party Logistics provider (3PL) can also be helpful. Reach A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com to stay up-to-date with any occurrences in the shipping industry. Along with educating you on what to expect, we find solutions for protecting your shipments from disruptions.
by A1 WorldWide Logistics | Sep 19, 2024 | East Coast Protests, Shipping Logistics, Supply Chain
As a potential ILA protest approaches on October 1st, a recent impact is the strike lowering spot rates. The International Longshore Association (ILA) Is planning to halt operations next month when their six-year contract terminates on September 30th. Along with higher wages and pensions, the ILA is protesting for better labor conditions and opposing port automation. Ongoing talks between the ILA and the United States Maritime Association (USMX) stopped weeks ago without a contract resolution. A strike could affect international and domestic shipping in various ways, including pausing cargo movement and causing congestion. A potential port stoppage has already impacted shipping with a significant decline in East Coast spot rates.
How Is A potential Strike Lowering Container Rates?
Spot rates for containers going towards East Coast ports have declined due to the potential ILA strike. The Drewry’s World Container Index (WCI) noted a 21% decrease in rates from Shanghai to New York. During the week of September 9-13, the WCI decreased 13% to $4168 per 40ft container. The recent decline is resulting in shippers rerouting to West Coast ports to avoid the strike. As a result, demand for shipping to East Coast ports is decreasing, resulting in lower rates. While this has been the third consecutive week of decline, it is 282% higher than the pre-covid average. The Drewry index expects rates to fall faller in the next few weeks.
Containers going to West Coast ports had the opposite effect, with a one percent increase for 40ft containers. Along with increasing and decreasing rates, rerouting can have other effects, such as congestion due to higher volumes. The Los Angeles and Long Beach Ports are already the busiest in the U.S. regarding volume. An increase in traffic could lead to delays in supply chains for importers and exporters to the U.S. Another way shippers mitigate the impact of a potential strike is by shipping earlier than usual. Some even look for other conveyance methods like air and land to avoid delays.
The White House Will Not Block Potential Strike.
On September 17th, the National Retailers Federation (NRF) sent a letter to the Biden administration regarding stopping the potential strike. The message says, “A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend.” NRF is a group of 177 trade associates that rely on East and Gulf Coast ports for importing and exporting. Despite the letter from the NRF, the White House replied that it was not intervening in the protest. U.S. presidents may invoke the Taft-Hartley If necessary. This act forces dockworkers back to work for an 80-day cooling-off period if the disputes potentially threaten national security.
Despite not being involved, a White House representative said, “We encourage all parties to remain at the bargaining table and negotiate in good faith.” While lower rates may be attractive to shippers, it is due to a potential protest that can affect international shipping. A way to protect your goods is by using the help of a freight forwarder. A forwarder is the middleman who coordinates cargo movement on behalf of the shipper. They find solutions for navigating situations like port closures. Contact A1 Worldwide Logistics at info@a1wwl.com to speak to a forwarding regarding transporting your shipment internationally.
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