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 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 6, 2024 | Economic trends, Importing, Supply Chain
Unresolved negotiations are resulting in ILA strike threats continuing as the October 1st deadline is quickly approaching. The International Longshoreman’s Association (ILA) have been discussing a new contract with the United States Maritime Alliance (USMX). These talks have been unsuccessful as the current six-year contract ends on September 30th. A potential strike will shut down East and Gulf Coast ports and significantly impact international trade. It may also have a disastrous ripple effect through the U.S. economy, as numerous supply chains rely on these ports. With the U.S. import industry worth trillions of dollars, the pressure to find a deal before October 1st is rising.
Why Are The ILA Strike Threats Continuing?
The continuing threats are due to the unresolved resolutions between the ILA and USMX. A primary reason behind the negotiations is for a contract with a higher wage increase similar to the ILWU. In 2023, the ILWU (International Longshore and Warehouse Union) received a 32% hike after weeks of protests. Like their West Coast counterparts, the ILA is fighting for a similar wage increase. The ILA president, Harold Daggett, recently took to social media in a video expressing their displeasure. He notes, “If the employers don’t understand what his members are seeking, I have to go into the street, and we have to fight for what we deserve.”
Harold also believes that the USMX should adequately compensate the ILA for working continuously during the pandemic. Along with better pay, a significant issue has been pensions. While the ILWU has a single coast-wide retirement, part of the ILA does not have one. The workers that do have lower pensions compared to the ILWU. Terminals at the Port of Mobile in Alabama have also used an Auto Gate system that automatically processes trucks. The ILA notes that this system violates the current contract by removing the dockworker’s jobs. Vice President Dennis Daggett says, “We’re not going to allow that cancer to come here on the East Coast”.
Cargo Shifting To The West Coast?
East and Gulf Coast ports are responsible for nearly 43% of all U.S. imports and are critical for trade. With strike threats affecting many supply chains, shipments have already begun moving to West Coast ports. This is similar to the 2022 ILWU protests, where West Coast port imports switched to East Coast ports. The fear is that a potential strike can lead to port congestion due to a volume increase. Imports that come into the U.S. already tend to rise during this period because of the holiday season. Analysis reports that a two-week walkout could result in a slowdown that will take until 2025 to clear.
Port congestion can have numerous other challenges in shipping. Volume increases that come from strikes lead to delays that disrupt supply chains. Delays also look unfavorable for companies with customers that rely on imports. Along with supply chain disruptions, congestion can increase overall costs to ship cargo, such as demurrage. Demurrage is a fee the shipper must pay for containers that remain at the port past the allotted time. Container rates may continue to rise further from the protests since they rose over the last year. Various importers and exporters relying on East Coast ports are urging both sides to continue negotiations. Reach A1 Worldwide Logistics at 305-440-5156 or visit our website to keep up to with the current situation.
by A1 WorldWide Logistics | Aug 30, 2024 | Economic trends, Shipping Logistics, Supply Chain
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.
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