Union contracts for East and Gulf Coast port dockworkers are ending, potentially resulting in ILA workers going on strike. On September 30th, the current six-year contract between the International Longshoreman Association (ILA) and United States Maritime Alliance (USMX) expires. ILA is a union of 85,000 longshore workers spread out amongst 56 ports in the U.S., including Puerto Rico. The ILA president recently noted that its members are fully onboard with going on strike on October 1st if the USMX does not meet their demands. In the last strike that happened in 1977, workers walked off for almost seven weeks.
Over the last year, East and Gulf Coast port workers of the ILA have pushed for a new master contract when their current one finishes. In particular, one with a wage increase above the 32% hike West Coast ILWU dockworkers received in 2022. They are also pushing for higher pensions, with the ILWU having a higher single coast-wide pension. Negotiations paused in early June because of a dispute regarding automation at the Port of Mobile. Terminals at the port used an Auto Gate system that autonomously processes trucks, replacing ILA jobs. The ILA’s Wage Scale Committee will meet on September 4th and 5th to review contract demands when negotiations do return.
What Do ILA Workers Going On Strike Mean For International Shipping?
A strike by ILA dockworkers may significantly impact shippers who must move cargo internationally. Especially with more than half of the U.S. imports going through East and Gulf Coast ports. Market research company Sea-Intelligence reported that a strike lasting one day could take approximately three days to clear. They also note that a strike of two weeks could result in slowdowns to 2025. Despite the two largest ports by TEU being on the West Coast, the East Coast has the following five busiest. Companies are already diverting shipments from East Coast ports or shipping early to avoid potential delays. Along with congestion and delays, a strike can affect shippers in other ways.
For supply chains, this can lead to inventory disruptions, which can be unfavorable if the shipper has customers. Closed ports also may cause traffic for domestic shipping, with carriers having to reroute to other locations. Another concern is that supply chain issues from protests will contribute to the current inflation crisis. With rising prices already being an area of concern in the U.S., a strike will also grow shipping costs. Container rates have increased since the beginning of the year, which may add to the rise. Situations like the Panama Canal drought and the Red Sea crisis have already contributed to surging rates.
A1 Worldwide Logistics
Although situations like a potential port strike can be stressful, it should not stop you from shipping internationally. A shipper should, however, take steps to protect their supply chain. They must prepare for delays and disruptions in their shipping schedule and stay current with news reports and updates. You can also get help from a 3PL (third-party logistics) provider like A1 Worldwide Logistics. 3PLs offer various transportation services while determining your cargo’s best course of action. Reach A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com for assistance with your shipping journey. We help your global supply chain by providing transparency and solutions regardless of the situation.
