Unless significant progress is made in negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), thousands of workers at East Coast and Gulf Coast ports are expected to launch an indefinite strike on October 1, 2024. These ports handle approximately 60% of U.S. maritime traffic and half of the country’s container volume, with JPMorgan forecasting a daily economic impact of $5 billion.
Negotiations between the two parties have been stalled since June, increasing the likelihood of the strike. President Biden has refrained from intervening with measures that would force workers to delay or suspend the protest through the Taft-Hartley Act, despite calls from some business groups to do so. With the strike looming in the midst of an election campaign, the entire U.S. logistics system is bracing for its impact by accelerating orders or redirecting shipments to West Coast ports—at least while that option remains viable.
Major container terminals have already extended their operating hours, and supply chain transporters are setting strict deadlines for pickups and deliveries to avoid container backlogs, particularly with refrigerated goods. There has also been a reported increase in shipping rates for October, with container fees on the East and Gulf Coasts rising from $400 to $3,000 per FEU (forty-foot equivalent unit). In response to cost concerns, the Federal Maritime Commission has warned carriers and operators not to inflate invoices with improper extra charges for storage, such as detention and demurrage, as occurred during the pandemic.
While many now expect the strike to go ahead, uncertainty remains over its duration. A short strike would allow the preventive measures to mitigate some of the damage, helped by lessons learned during the COVID-19 crisis. However, if the strike drags on for weeks, congestion could affect not only the U.S. ports not involved in the protest but also the origin and destination ports for containers, particularly in Asia, with knock-on effects in Europe.
The workers are demanding significant wage increases, as well as measures to curb the advance of port automation, including a complete ban on the full automation of cranes, ground handling, and terminal access systems.
