Client Advisory: ILA Contract to Expire Sept. 30 – Updated Sept. 24

Client Advisory: ILA Contract to Expire Sept. 30 - Updated Sept. 24

WHAT'S THE LATEST

The International Longshoremen's Association's (ILA) current labor contract covering union members across the US East Coast and Gulf Ports, expires on September 30. If a new agreement with the United States Maritime Alliance (USMX) is not reached by then, ILA is preparing for a potential coast-wide strike on October 1.

Update as of 9/24: In its most recent statement, USMX shared that despite additional attempts to engage with the ILA and resume bargaining, they've been unable to schedule a meeting to continue negotiations on a new contract.

WHAT WE KNOW

• In the statement, USMX "has received outreach from the Department of Labor, the Federal Mediation & Conciliation Service (FMCS), and other federal agencies."
  • USMX noted they'd be open to working with the FMCS, but that's only possible if both sides agree to mediation.
• Due to a 'no strike' clause in effect until the current contract's expiration, no labor action is expected before October 1.
• A strike would affect major ports along the East and Gulf Coasts, including New York/New Jersey, Savannah, Charleston, Houston and Miami and could impact over 50% of US container imports. This would disrupt supply chains, with delays of 4-6 weeks or longer depending on the length of any potential strike.
• JPMorgan transportation analysts anticipate a strike would cost the economy $5 billion a day, which is about 6% of the daily gross domestic product.
• If a strike occurs starting Oct. 1, you can expect severe congestion and halted operations at these major ports.
  • For each day the ports are shut down, analysts estimate it would take Container Freight Stations (CFS) roughly 6 days to clear the backlog.
  • Warehouses and transportation hubs would face delays but may be manageable short term.
  • Trucking and rail transportation would be heavily impacted and would lead to higher costs and longer delays.
• Ports in the Northeast are already dealing with slowdowns due to a recent surge in imports and issues with returning empty containers.
• Federal law provides a mechanism for the President to require workers remain on their jobs and prevent a strike if the impacts could affect national security.

WHAT'S NEXT?

As your logistics partner, we are ready and able to pivot quickly. Our team is monitoring the situation closely, hoping the negotiations between all parties will be resolved before the expiration of the current contract. In the event of labor disruptions, we're prepared to implement contingency plans to ensure continuity of our export and import services where an alternative routing is possible.

We will frequently communicate and advise on the situation as more details become available.

If you have questions, please reach out to your SEKO representative, or email us at [email protected].

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