In October 2024, U.S. Dock Workers across the East and Gulf Coasts went on strike for the first time since 1977. The strike began 1st October and ended two days later on 3rd October when the United States Maritime Alliance (USMX), agreed to a short-term contract extension with the International Longshoremen’s Association (ILA) until 15th January 2025. As that date looms nearer, both parties are no closer to reaching a final agreement and another strike looks possible.
On 6th December, over 265 trade organisations came together in a letter, calling for both parties to return to negotiations and settle a final contract after the ILA walked away from the table on 12th November. With uncertainties rising and the 15th January getting closer, businesses are preparing for potential global disruption. We’ve put together a guide on everything businesses need to know about the potential U.S. port strikes, supply chain challenges and how to mitigate these as we enter 2025.
The ILA is a union that represents over 45,000 U.S. dock workers across major ports in the U.S.
The ILA has been negotiating a new 6-year contract with the USMX, an alliance of port operators, to ensure better pay and working conditions for employees. One of the ILA’s main concerns with working conditions is the rise of automation in port operations and the impact this will have on job security.
The ILA have repeatedly expressed their opposition to automated technology and don’t want
machines responsible for operations that humans would usually handle. The USMX however
argues that new technologies are essential for improving port efficiencies and no one will lose their jobs to automation.
After striking for three days in October, the USMX agreed to a 62% increase in wages over a 6-year basis for dock-workers, providing the ILA with a short-term agreement and deferring negotiations over the master contract until 15th January. Negotiations between the two parties began again in November, mainly surrounding the use of automation at ports, however the ILA walked out after the USMX proposed to expand the use of semi-automated cranes.
Despite only lasting three days, the October strike had a large impact on supply chains and created long delays at ports. Shipping vessels that were already heading to U.S. ports on the East and Gulf coasts were expected to drop their anchor and wait offshore until the industrial action ended. According to reports, 54 container ships were waiting outside of ports when the strike ended, compared to the 5 vessels that were waiting when they began. The strikes cost the U.S. an estimated $5 billion a day and took 2-3 weeks to clear the backlog of cargo.
If ILA members are to strike again, it will affect 36 ports across the U.S. East and Gulf coasts. This is a major global trade route for sea freight and ports in this area handle around half of the cargo that enters and leaves the U.S. The October strike only lasted 2 days, but led to a build up of ships waiting to enter the ports and caused supply chain disruptions. If this potential strike lasts longer, this could lead to longer supply chain delays and shortages of goods in stores across the country.
The Gulf Coast ports handle around 25-30% of industrial machinery and heavy goods exports bound for Europe and Latin America from the U.S., while East Coast ports manage around 30-40% of U.S. imports of fresh produce and processed foods from Europe and Africa. Major ports such as New York/New Jersey and Savannah are vital for managing the import of retail and consumer goods. With all of these ports closing for an undetermined period, this could cause significant disruptions to supply chains across not only the U.S, but globally as well.
These strikes aren’t the only uncertainty U.S. trade and supply chains face however. It is expected that when President-elect Donald Trump comes into office, he will implement new tariffs in early-2025. These changes will place higher tariffs on all goods imported into the U.S, especially those from China, Mexico and Canada. Goods coming from Canada and Mexico will see a 25% tax on imports while goods from China will see an additional 10% tariff. With a lot of ecommerce and retail goods coming from China, businesses are getting ahead of potential price increases by ordering inventory in advance.
With the Lunar New Year also upcoming, which sees operations halting across Asia for 2-3 weeks, businesses are racing to secure space on vessels before the strikes, tariff changes and holiday shutdowns begin. This has caused an increase in imports to U.S. ports as retailers try to avoid the impact of the strikes, tariff changes and Lunar New Year shutdowns for as long as they can. Businesses globally are being warned that container shipping is expected to be ‘chaotic’ at the start of 2025 due to all of these events.
To prepare for the potential impact the U.S. port strikes will have on supply chains, there are several steps businesses can take. Shippers are being encouraged to divert their goods to alternative ports on the West Coast or avoid shipping freight to the East Coast until the strikes are resolved, particularly if their shipments aren’t time-constrained. In urgent situations however, consider using air freight to reach your destination, although demand and costs are currently high in this area too.
It’s important for businesses to be prepared for delays during this period and mitigate these by sending shipments early wherever possible. Higher rates should also be expected during this time due to demand, requiring businesses to plan and budget accordingly. Partnering with a trusted freight forwarder however will provide businesses with valuable advice and expert solutions to help them navigate these challenges.
At Jenkar, we specialise in providing our customers with personalised freight solutions and expert advice to help overcome any supply chain challenges. Our dedicated team will find you a cost-effective and reliable solution to get your goods to its final destination. Let us be your trusted freight forwarding partner through global disruptions and help keep your supply chain running smoothly. Contact us today and experience efficient freight solutions with Jenkar.
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