At the beginning of October 2024, the ILA Union walked off the job for about 3 days - shutting down nearly all ports on the US East and Gulf Coasts. Dock workers agreed to return to work after the USMX accepted a roughly 62% increase in wages over the life of a new 6-year agreement. The key topic of automation and other minor points were kicked down the road with a new deadline of 15 January 2025 to finalize the tentative deal.
The aftermath of the 3-day strike was accurately projected by the industry analysts in that congestion and bottlenecks were persistent throughout the month of October for both U.S. ocean exports and imports.
The ILA and the USMX agreed to return to the negotiating table once the results of the recent presidential election were known to the world. Both parties got together in New Jersey for 2 days beginning on 12 November 2024, but by the end of that Wednesday, the talks had broken off once again over the subject of automation technologies at the ports. This development has been perceived as alarming by many observers as it is reminiscent of the breakdown in negotiations back in June. This current halt in dialogue increases the chances of another potential strike in January. Both sides appeared to stand firmly and made strong statements on the automation topic in early December.
Key Differences for the New Deadline
In the third quarter of 2024, many shippers and carriers took a wait-and-see approach to anticipating the potential strike. Some importers opted to frontload goods, and some exporters shipped out early. In the first week of October, many parties grew anxious about the prospects of an extended strike and quickly looked to execute contingency options.
This time around, many shippers are anticipating a greater chance of a strike and are also being more proactive with their contingency options.
One key learning from the previous episode was the viability of PSA BDP’s Contingency Considerations for helping customers navigate around the impacted ports:
- Air Transportation
- Routing via the U.S. West Coast
- Routing via Canada
- Routing via non-ILA U.S. ports
- Routing via Mexico
PSA BDP supported many customers through the first 4 options, and many of those customers are already pre-emptively moving shipments via those alternative routings.
As a reminder, air transportation is the first and best option for critical shipments. It is the closest to a guarantee to avoid major delays. The second option is via the U.S. West Coast. There are many options here, but we caution that there is still a bit of congestion out there, especially in the L.A. / Long Beach area, where there is significant dwell time at the rail. Canada - specifically Halifax – provided a lot of flexibility as a rail and truck gateway to the U.S. Lastly, the carriers at non-ILA ports, such as PSA Penn Terminals, were open for business and receptive to supporting our solutions.
At this juncture, it is key for shippers and importers to monitor and identify critical shipments in the pipeline and their corresponding lead times. If a potential delay of 2 weeks or more would be deemed catastrophic, now is the time to review the playbook for contingency options for those shipments.
