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.
