A looming strike by the International Longshoremen’s Association (ILA) threatens to severely disrupt supply chains across the US, particularly along the East and Gulf coasts.
With negotiations between the ILA and the United States Maritime Alliance (USMX) at a standstill, the possibility of a work stoppage as soon as 1 October 2024 is causing increasing concern among shippers, businesses, and federal agencies.
The breakdown in talks comes after the ILA rejected USMX’s latest contract proposal, citing inadequate wage increases and dissatisfaction with automation policies. While the USMX offered what it described as “industry-leading wage increases”, the ILA is demanding a significant 78% rise over six years.
The wage dispute is compounded by the union’s insistence on stronger measures to block automation at marine terminals, a point of contention that has stalled negotiations. The ILA claims that automation threatens job security and accuses terminal operators of violating current agreements by introducing semi-automated systems without consent.
The impact of a strike could be devastating for supply chains, particularly as it would hit during a critical period of the shipping calendar, coinciding with peak shipping season and China’s Golden Week holiday.
Each day of stoppage is estimated to take five days to recover from, and could create major backlogs in ports, with a ripple effect that would spread throughout supply chain infrastructure, impacting industries reliant on timely shipping.
Political intervention remains uncertain. The Biden administration, which played an active role in preventing a rail strike in 2022, may feel pressure to act again. However, the ILA has expressed a preference to negotiate without government involvement, further complicating potential efforts to avoid a strike. The proximity of the 2024 presidential election also adds a layer of political complexity, with both major campaigns focusing heavily on securing union support.
As the threat of a strike looms large, industry observers fear it could mirror the long strikes of the 1970s, with no resolution in sight. If the ILA proceeds with its planned action, the effects will be felt nationwide, with significant delays across the country.
If you have any concerns about the impact of an ILA strike, we can review your situation, explain your options and, if necessary, consider contingency plans.
Global Forwarding USA has dedicated departments for ocean, air and national customs brokerage, with domestic transport for container movements, LTL and FTL.
EMAIL Adam Davies, Global Forwarding USA, Vice President.
