Potential Port Strike on the U.S. East and Gulf Coasts
Potential Port Strike on the U.S. East and Gulf Coasts
There are growing concerns about a possible strike at ports along the U.S. East and Gulf Coasts. Here’s what you need to know about the situation.
What’s happening at the ports?
The International Longshoremen’s Association (ILA), representing over 85,000 dockworkers across North America, is preparing for a potential strike if a new labor contract isn’t reached by September 30, 2024. The current contract covering the East and Gulf Coast ports is set to expire, and the union has made it clear that a strike is on the horizon if no agreement is reached with the United States Maritime Alliance (USMX).
When could a strike begin?
According to a September 5th statement from the ILA, nearly 300 delegates from the union’s Wage Scale Committee unanimously supported the call for a strike starting October 1, 2024, if a new agreement isn’t in place by then. Ports from Maine to Texas would be affected.
The ILA has stated they do not seek external mediation, such as the possible intervention of the Biden administration through the Taft-Hartley Act, which could impose an 80-day cooling-off period if the strike is deemed a threat to national health and safety.
The union’s key demands include a 78% wage increase and stronger protections against terminal automation.
Impact on supply chains.
A strike would have severe consequences for global supply chains and U.S. imports. Roughly 43% of all containerized imports to the U.S. pass through ILA-controlled ports, meaning a work stoppage could lead to massive congestion. Transatlantic routes from Europe and transpacific routes from Asia would feel the impact almost immediately.
A one-week strike could take five to six weeks to clear up once operations resume.
Options for shippers
Shippers will need to explore alternative solutions if the strike moves forward. Increased traffic to West Coast ports like Los Angeles is expected, but this option comes with challenges, as those ports are already experiencing congestion. Cargo from Europe may have to be rerouted through the Panama Canal, which will likely add more delays.
Canadian ports, often considered as alternative gateways, would struggle to handle such an influx of cargo due to limited capacity. Additionally, disruptions in Canadian rail services pose further risks.
Airfreight from Europe to the U.S. could be a viable option, with available space from key hubs like London Heathrow and Frankfurt. However, high demand is expected at U.S. airports such as Boston, New York, Charlotte, Washington, and Miami. Alternate hubs like Atlanta, Chicago, and Houston could help absorb some of the overflow.
For urgent shipments, consolidating smaller shipments into larger ones can optimize space and reduce costs. Air charters may also be an option for critical freight.
What else should you know?
Should a strike occur and later be resolved, significant congestion at East Coast ports is expected for weeks, depending on the duration of the work stoppage. Several scenarios could unfold, but it’s essential for shippers to stay informed and proactive in their planning.
If you have concerns about how a potential strike may impact your shipments, Crane Worldwide’s team is available to help you explore your options and ensure your supply chain remains as smooth as possible.
