September 17, 2024

Potential Port Strike on the US East Coast and Gulf

Below is some information regarding the potential for a strike at East and Gulf Coast ports.

What is happening at the East and Gulf Coast Ports?

The largest union of maritime workers in North America, The International Longshoremen’s Association (ILA) represents over 85,000 people. The union master contract that represents the US East and Gulf coast ports is scheduled to expire on September 30, 2024. The latest statement from the ILA posted on September 17th, indicates that if a new contract with USMX is not on the bargaining table nor agreed to, port strike action will take place.

The longshore workers are responsible for many operational aspects of key ports up and down the East Coast of the United States from Maine to Texas. Longshoremen play an instrumental part of port operations, handling freight including the loading and unloading of cargo arriving by sea. 

When would a potential strike on the East and Gulf Coast start?

As stated on the ILA website on September 5th: "Nearly 300 International Longshoremen’s Association Wage Scale Delegates ended their two-day Wage Scale Meetings today in New Jersey by unanimously supporting International President Harold J. Daggett’s call for a coastwide strike at ports from Maine to Texas on October 1, 2024, if a new agreement with United States Maritime Alliance is not reached at that time."

Daggett added “the ILA is not seeking intervention from outside agencies” given speculations that the Biden administration may invoke the Taft-Hartley Act which would impose an 80-day “cooling-off” period if it is determined that the strike threatens national health and safety. The Delegates remain firm on key demands, including wage increases of 78% and stricter protections against automation at marine terminals.

What would be the impact on logistics operations?

No question exists that strike action on the East Coast would heavily impact global supply chain operations and imports into the United States. The transatlantic ocean freight from key Dutch, German and Belgian ports as well as the Transpacific eastbound trades ex Asia to the US would be the first in line to feel the impact from any potential strike and there would be ripple effects across global supply chains.

43% of the total import container volume into the US runs through the ILA controlled ports. Congestion at the ports would be considerable yet dependent on how long strike action takes place.  A week of strike action sums up to 5-6 weeks clean up once the strike has ended.

Although traditionally the East Coast ports are not heavily impacted by seasonality like on the West Coast, major imports include machinery and vehicles that for various reasons cannot be transported other than by ocean freight. 

What are shippers options if strike action prevails?

For ocean freight services, if East Coast ports are out of action, we expect to see a surge in freight towards Los Angeles and the West Coast. However, freight coming from Europe will involve passing through the Panama Canal and increased traffic will be inevitable.

As the West Coast ports are already congested in getting the landed containers out by rail, you should consider additional lead times if this option is viable for your freight. Crane Worldwide has offices and warehouse space available throughout the West Coast should additional capacity be required. 

The Canadian ports will struggle to handle such volumes as alternative ports of entry as the capacity simply isn’t available. The potential risk of Canadian rail disruption should also be an element of consideration. 

Air freight from Europe to the United States could be a potential option and Crane Worldwide has secured space availability from London Heathrow and Frankfurt as well as other major European hubs. If the strike does come to fruition, we would expect heavy demand on airports such as Boston, New York, Charlotte, Washington and Miami. If this is the case, alternative airport hubs such as Atlanta, Chicago and Houston could be utilized with our own domestic trucking service to support road freight movements.

Should air freight become a necessity, we would obviously advise that urgent and critical shipments are prioritized on customer commitments, urgency, and value. Where possible, a shipper should consolidate smaller shipments into larger consignments to optimize space and reduce costs as well as assessing the volume of cargo needing air freight and determining the required capacity to meet demand. 

In case of urgent requirements, Crane Worldwide also offer air charter services. 

What else do I need to know?

If strike action does take place and subsequently a resolution is put in place, there will be heavy congestion at the East Coast ports for a considerable amount of time. This is dependent upon how long the strike would impact operations. There are a number of scenarios that could take place should strike action proceed, should this situation escalate or you have concerns with regards to your current shipment planning, please don't hesitate to reach out to a member of the Crane Worldwide team to discuss possibilities. 

If you have any concerns relating to the potential strike action, please don't hesitate to contact your local Crane Worldwide representative or reach out to us online