The anticipated US port strike officially began on October 1, 2024. The strike broke out among dockworkers on the US East Coast and is the largest port strike since the 1970s. Despite last-minute negotiations between the union ILA and the employers' organization USMX the strike broke out and affected 36 ports. In this article we update you on the US port strike and provide your business with tips on how to manage situations like this.
What is the US port strike about?
The International Longshoremen's Association (ILA) launched its first port strike since 1977 on October 1, 2024. Thirty-six ports along the U.S. East Coast and Gulf Coastwere closed, disrupting shipments of goods – including food and vehicles. However, shipments of energy-related items, bulk items, waste management, and road salt were excluded from the US port strike.
The conflict centered around the union's demand for a nearly 70% pay increase, citing the significant profits made by employers during the pandemic and rising automation at the terminals. Dockworkers are concerned that increased automation may lead to job losses, which is why they seek to reduce investment in this area.
Last-minute negotiations took place on September 30. Sources indicate that the United States Maritime Alliance (USMX) offered close to a 50% wage increase, doubled contributions to retirement savings, and improved healthcare options. However, no new proposals were made regarding automation.
These negotiations also fell through, leading the union's 45,000 members to the US port strike along the East Coast.
The strike came to an end on October 3, after dockworkers struck a tentative deal with port operators.
The International Longshoremen’s Association (ILA) announced that the union had reached an agreement with the United States Maritime Alliance (USMX) on wages, suspending their walkout until January. The tentative agreement is for a wage hike of around 62%.
Is your company importing internationally? Read our guide to what international shipping is.
Who is the ILA and how are they related to the US port strike?
The International Longshoremen's Association (ILA) is a labor union in the United States representing dockworkers and longshoremen. Founded in 1892, the ILA advocates for the rights and interests of its members, who work in ports and shipping.
It was the ILA members who were striking across the US ports fighting for better wages. The union negotiates contracts, ensuring fair wages, benefits, and working conditions for its members. The ILA plays a crucial role in the maritime industry by supporting workers and promoting safety and efficiency in port operations.
What goods will be affected by the US port strike?
Time-sensitive imports, especially food, were the goods that were most affected by the strike. The ports involved handle around 14% of agricultural exports and over half of imports, including a large portion of bananas and chocolate.
This summer, US imports increased as businesses rushed shipments to avoid delays caused by the port strike. Seth Harris, a professor at Northeastern University and former White House labor adviser, stated:
"While we might not see immediate and significant economic effects, if the strike continues for weeks, we could start to see price increases and shortages of goods."
Since the strike is no longer active we will most likely not see any significant economic effects. However, the workers will return to the bargaining table on January 15, 2025, to negotiate all outstanding issues.
What will the economic impact be of the US port strike?
The US port strike could have had an impact on over a third of exports and imports, potentially costing the U.S. economy 5 billion dollars per day. The strike luckily lasted for 4 days, which means that what the experts had predicted was much worse than what actually happened.
The strike could trigger a chain reaction that will unfold over the coming months. This could lead to increased overall shipping costs, impacting consumers and businesses that rely on "just-in-time" supply chains for their products.
When was the last port strike in the US?
As we mentioned earlier, the last major port strike in the United States occurred in 1977. This earlier strike also involved dockworkers and was significant due to labor disputes over wage increases and working conditions.
Read more about ILA's history.
How will the US port strike affect the supply chain?
Ocean supply chains have encountered significant challenges this year due to the Red Sea shipping crisis, a prolonged drought impacting the Panama Canal, and the collapse of the Baltimore bridge. With over 40% of containerized goods entering the US via East and Gulf Coast ports.
The strike had immediate effects primarily hitting the U.S. East and Gulf Coast ports. There will also be ripple effects for ships waiting outside the ports, resulting in port congestion and delays for their next journeys to the US.
Disruptions are likely for ships departing from Europe and the Mediterranean toward the end of October and early November. Additionally, delays for ships leaving Asia are anticipated in late December and early January, coinciding with the mini-peak in container shipping that occurs before the Chinese New Year.
Read more about what's driving the 2024 increase in shipping costs.
How to handle the US port strike 2024
If a strike like the US port strike impacts your imported or exported goods in the future, here are some tips on how your company can effectively manage the situation:
- Contact your shipping company: Ask them how the situation impacts your shipment and if there are any alternative solutions, such as changing the port or transport route.
- Explore alternative transport options: If ocean freight is heavily impacted, consider air freight, rail, or land transport if feasible for your destination.
- Prepare for delays: If no alternative transport is available, be ready for delays. Inform your customers and partners about the expected timeline.
- Consider using other ports: Since a strike like the Us port strike affects specific ports, you might be able to reroute your goods to unaffected ports.
- Obtain insurance: Ensure your goods are insured against delays or other issues that may arise during the strike.
- Stay Informed: Keep up with news and updates to gain insights into when it may be resolved.
Contact us at Bertling if you have questions regarding your shipping. We are continuously updated on the latest developments regarding situations like the US port strike.
We offer transportation solutions in rail freight, sea freight, road freight, and air freight.
Also, check out our guide on which transport solution you should choose. Other freight alternatives may be a better option than you think.
