If no significant progress is made in negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), thousands of workers at ports on the U.S. East Coast and Gulf Coast will begin an indefinite strike on Oct. 1, 2024. These ports handle approximately 60% of U.S. maritime traffic and half of all containers, with JPMorgan estimating a daily economic impact of $5 billion.
Currently, negotiations between the two sides have been stalled since June, increasing the likelihood of a strike. President Biden has signaled that he does not intend to intervene by invoking the Taft-Hartley Act, which could prevent or halt the strike, despite calls from some business associations to do so. This reluctance to intervene comes in the middle of the presidential election campaign. As a result, the entire U.S. logistics system is preparing for the strike’s impact by advancing orders or redirecting shipments to West Coast ports — at least as long as this remains feasible.
Major container terminals have already extended their operating hours, while transport operators along the supply chain are setting deadlines for pickups and deliveries to prevent container pileups, especially refrigerated ones, in storage yards. There is also a noted increase in freight rates for East Coast and Gulf Coast containers from October, with prices ranging from $400 to $3,000 per FEU (forty-foot equivalent unit). Regarding cost issues, the Federal Maritime Commission has warned carriers and operators against adding improper surcharges for storage fees (detention and demurrage), a practice seen during the pandemic.
Many are now assuming that the strike will indeed occur, but the duration remains uncertain. If the strike is brief, preventive measures could mitigate the damage, drawing on lessons learned during the COVID-19 pandemic. However, if it lasts several weeks, congestion could affect not only U.S. ports that remain operational but also the origin and destination ports for containers, particularly in Asia, with repercussions reaching Europe as well.
The workers are demanding significant wage increases and measures to curb the advance of automation in ports, even calling for a complete halt to the automatic management of cranes, ground operations, and terminal access.
