As January approaches, discussions of a possible strike by the International Longshoremen's Association (ILA) are resonating across the logistics and supply chain sectors. While no formal action has been declared, the dispute revolves around the adoption of automation—a divisive topic between the ILA and the US Maritime Alliance (USMX). Although an agreement on compensation has been achieved, the two sides remain at an impasse regarding the implementation of automation in port operations. This ongoing disagreement has raised concerns about potential labor disruptions at ports along the East and Gulf Coasts.

Should no agreement be reached by January 15, the ILA has announced it will proceed with a strike at U.S. East Coast and Gulf ports. In the meantime, ocean carriers, anticipating that the parties may not reach a resolution, have begun communicating potential surcharges. Depending on container type and dimensions, these disruption charges range from $650 to $1,250 per TEU. The charges would apply to all containers with an origin gate-in date starting in mid-January.

Potential Impacts

1. Congestion at Alternative Gateways

A strike could push shippers to divert cargo to West Coast ports or inland routes. However, these alternatives are already strained by backlogs and increased seasonal volumes.

2. Rising Costs

Apart from surcharges the diversions, delays and longer transit times may lead to skyrocketing freight costs for ocean and inland transportation. Businesses relying on just-in-time inventory system could feel the pinch most acutely.

3. Market Uncertainty

Uncertainty surrounding labor negotiations can disrupt planning cycles, forcing companies to secure additional warehousing space or shift procurement strategies.

As Shipex, we are communicating with the ocean carriers to provide contingency plans, diversifying supply chain routes to mitigate potential bottlenecks. Should you have any questions or comments regarding this topic, do not hesitate to contact your Shipex representative.

The Shipex team