In his opening remarks at last year’s International Longshoreman’s Association South Atlantic and Gulf Coast District Education Conference, ILA President Harold Daggett told a Nashville crowd to prepare for a strike at east and gulf coast ports. Based on the union’s recent cancellation of contract talks due to Maersk’s usage of an automatic gate system without employing union labor, it looks like the ILA is serious about staging a major labor action if its demands are not met.
As the ILA careens towards a labor action after its current contract expires on September 30, 2024, many industry veterans are recommending that shippers institute the same strategy they did when the ILWU was threatening a labor action last year: ship early and, if possible, route cargo through alternate ports.
“Up until this month it looked like the last year’s declaration by the ILA would not come to fruition, as many local unions have already reached agreements with their hometown ports,” said Peter Hsieh, OEC Group’s Vice President of Sales. “However, modernization has always been a major issue, and any modernization that does not use union labor will always generate significant pushback.”
A potential ILA strike is not the only thing that is creating real concern in the industry. Container availability and service disruptions at ports has quickly started to remind shippers of the problems that plagued them during the pandemic. Additionally, West Coast vessel dwell times are increasing and causing delays, and giving a preview of what might happen if an ILA labor action becomes reality. Red Sea diversions have also led to capacity problems causing prices to rise. Finally, tariffs are being increased on many goods being manufactured in China, leading many shippers to wonder if they are keeping up with the latest requirements and if the increased tariffs will negatively affect their businesses.
“Rates are starting to approach post-COVID levels, meaning that every shipper needs to refer back to their COVID playbooks and employ the strategies that allowed them to survive, namely, plan ahead, ship early, and maintain the same velocity despite the fluctuating rates to ensure the supply chain remains constant,” said Peter Ku, Vice President of Sales and Head of OEC Group’s Seattle Office. “Needless to say, it is going to be a rough time for shippers, and it will probably remain difficult until at least the end of the year. The best way to thrive in this market is to work with a provider with deep industry relationships and significant buying power.”
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