Looming Threat of Strikes at US Ports
Stalled labor negotiations at US ports on the East Coast and Gulf of Mexico pose a looming risk for retailers, manufacturers and other shippers already struggling with longer transit times and higher costs.
Contract talks between the International Longshoremen’s Association – East Coast and Gulf, which represents 45,000 dockworkers at three dozen ports from Maine to Texas – and the U.S. Maritime Alliance have yet to produce an agreement. The ILA canceled the scheduled start of talks in June after a foreign company began using an automated gate system at one of its terminals in violation of prior agreements.
The deadline for negotiations has already passed back in May, and without a resolution, the contract will expire at the end of September. In addition, workers at West Coast ports have announced that they might strike in solidarity.
What are the possible consequences?
If there is no agreement by the end of September, the union could call a strike, which would have a major impact on trade lanes and port operations, especially during the upcoming crucial holiday container shipping season.
Although some observers have speculated that US West Coast ports may protest alongside their East Coast counterparts in a show of solidarity, our experts believe this is unlikely. Such a development would severely paralyze the US Economy and points of entry into the country.
Are there any alternatives?
At this point, we see no alternatives other than using Canadian/Mexican ports (or switching to air freight). However, diverting shipments there would create such massive volumes that these ports and their inland infrastructure could not handle the sudden increase – their capacities are simply not set up for it.
Please be aware that these disruptions may increase operating costs, which will translate into higher rates and additional surcharges. We will, of course, continue to monitor the situation closely.
Feel free to contact your local cargo-partner team if you have any further questions or if you are interested in the tailor-made solutions cargo-partner offers to deal with the current challenges.
Cargo insurance can help in case of accident
Insure yourself against risks related to transporting cargo and protect your goods with cargo insurance. This covers not only damage/loss with respect to goods (as in accordance with terms of the policy), but is also applicable in cases of “Havarie Grosse”.*
cargo-partner’s freight insurance policies can insure your merchandise for up to 130% of its value and cover additional costs (e.g. carrying costs). Our Sea Cargo team would be happy to provide you with more detailed information.
* If a ship, with its cargo, is in distress at sea or endangered by fire or a lightning strike and is rescued alongside its cargo, then the cost of said rescue of ship and cargo is split proportionally amongst the goods’ owners and the ship’s owner according to the cost of the goods being transported. Even if the goods arrive undamaged.
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