Strike Disruption Imminent.Port workers from Maine to Texas are set to strike. |
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East and Gulf Coast ports are bracing for a total shutdown starting October 1, 2024, as contract negotiations remain at a standstill. Unless new contract terms are reached today (September 30, 2024), the International Longshoremen’s Association (ILA), representing over 45,000 port workers at 36 ports along the East and Gulf coasts, has voted to authorize a strike, the first of its kind since 1977. Wage increases of more than 70% and concern over automation operations top the list of grievances. The negotiation progress with the United States Maritime Alliance (USMX) broke down in June without any significant improvements noted. A strike of this magnitude has far-reaching implications. Nearly half of all US monthly imports are impacted, representing billions of dollars in trade and hundreds of thousands of local jobs. Even a small disruption can lead to weeks or months of port recovery time. Grace Zwemmer, associate U.S. economist with Oxford Economics has said, “Even a two-week strike could disrupt supply chains until 2025." The Biden administration has urged the parties to return to the bargaining table. "We've never invoked Taft-Hartley to break a strike and are not considering doing so now.” Logistics firms across the nation are preparing contingency plans, some of which were last used during the height of Covid. These include extended hours and weekend gates to help manage traffic ahead of the deadline. There are currently 147 ocean vessels in route to East Coast and Gulf ports carrying an estimated $34 billion in freight. The Port of New York and New Jersey have already begun preparing for a complete work stoppage. The Port of New York/New Jersey is the largest port on the U.S. East Coast and the second largest in the nation, responsible for moving 7.8 million TEUs of cargo just last year. Port Congestion Surcharges Announced With the likelihood of a strike at US East Coast and Gulf Coast ports, some carriers are announcing surcharges to help offset disruption costs. Both CMA CGM and Hapag-Lloyd followed an earlier notification by MSC Mediterranean Shipping Company informing customers of their intent to start implementing surcharges for both imports and exports from the impacted ports. Announced charges, on average, range $800-$1,500 per container. The carriers, in announcing their new surcharges, called them “indefinite” in their duration.
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