As of 12:01 A.M., October 1st, 2024, the long-anticipated strike by the ILA (the International Longshoremen’s Association) has officially begun, leading to a complete shutdown of all U.S. East and Gulf Coast ports until further notice.
This development means that no cargo can move in or out of these ports. Our sources indicate that the strike is expected to last at least one to two weeks, with significant backlogs and congestion likely to persist well into the next year.
Clients with cargo currently en-route to these ports should prepare for potential delays, as their shipments may be stuck at sea. If the strike extends beyond initial expectations, carriers might invoke “Force Majeure,” which could result in unloading cargo at a nearby international port instead.
Furthermore, all containers located in the affected U.S. East and Gulf Coast ports are now effectively immobilized, and those containers may incur detention and demurrage fees. Carriers have also stated that they will not cover or reimburse any charges related to chassis or third-party services due to the work stoppage.
Diverging Post-Pandemic Perspectives Lead ILA and Employers to Historic Strike
A decades-long era of labor harmony on the U.S. East and Gulf Coasts has collapsed, as the International Longshoremen’s Association (ILA) begun a strike that could disrupt global supply chains.
At the heart of the dispute are diverging perspectives on the role of labor in the post-pandemic container shipping industry. The ILA, emboldened by its historic success in securing favorable contracts, is seeking substantial wage increases and protections against automation. Conversely, ocean carriers are resisting these demands, citing the relatively low productivity of U.S. ports and the challenges of recouping operating costs.
The standoff has been brewing for months, with both sides digging in their heels. The ILA, led by President Harold Daggett, has been vocal in its preparations for a strike, leveraging public opinion and political pressure to its advantage. The union believes that the Biden administration, wary of alienating union voters ahead of the presidential election, will be reluctant to intervene using Taft-Hartley Act.
While the carriers have offered a 32% wage increase, the ILA is seeking a more significant pay hike, along with restrictions on automation and guarantees for dockworkers in the Southeast. However, carriers are hesitant to concede on these demands, arguing that U.S. ports are less efficient than their global counterparts and that they struggle to recover operating costs.
The strike has far-reaching implications for the U.S. economy, as it could disrupt the flow of goods and drive-up consumer prices. Shippers are scrambling to expedite shipments to avoid disruptions, while businesses are bracing for potential supply chain disruptions and increased costs.
The onus is on both sides to find a compromise that can quickly end the strike and ensure the continued smooth functioning of the U.S. port system.
Source: www.joc.com