Client Advisory: ILA East Coast/Gulf Contract to Expire Sept. 30 – Updated Sept. 27

Client Advisory: ILA East Coast/Gulf Contract to Expire Sept. 30 - Updated Sept. 27

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 Monday, 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. A walkout would be the first East Coast dock strike since 1977.

Update as of 9/27: On 9/26, the USMX filed an unfair labor practice (ULP) complaint with the National Labor Relations Board requesting "immediate injunctive relief" after the ILA refused to negotiate.

WHAT WE KNOW

• In a statement released earlier this week, 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 about 36 major ports from Maine to Texas and could impact more than 68% of all containerized US exports and roughly 56% of US imports.
  • For context, the value of containerized imports at those 36 ports amounted to $588 billion in 2023.
• The Port of Long Beach experienced unprecedented growth in August, setting a new record for monthly cargo volume in its 113-year history.
• JPMorgan transportation analysts anticipate a strike would cost the economy $5 billion a day, which is about 6% of the daily gross domestic product of the United States.
• If a strike occurs starting Oct. 1, it's widely expected that it would shut down 5 of the 10 busiest ports in North America.
• In an event of a strike, you can expect severe congestion and halted operations at these major ports.
  • For each day the ports are shut down, it is estimated that it would take nearly a week of recovery.
  • 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.
• Federal law (the Taft-Hartley Act) provides a mechanism for the President to require workers remain on their jobs and prevent a strike if the impacts could affect national security.
  • As of 9/27, the White House stated, "We've never invoked Taft-Hartley to break a strike and are not considering doing so now."

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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