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As widely reported, negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) broke down in early November. If a strike occurs, it could have significant implications for imports to the East Coast.
Recap
In mid-October, during the last strike, the dispute over wages was resolved. However, discussions on automation were deferred to mid-January. During the November negotiations, the USMX proposed a compromise, agreeing not to implement full automation but pushing for “semi-automation,” primarily at gantry cranes used for unloading cargo from vessels.
The ILA opposed this proposal, arguing that it was a pretext for full-scale port automation, similar to what they believe occurred under the previous contract, where more automation was implemented than initially agreed upon. This disagreement led to a deadlock, with both sides walking away from the table and no progress made since.
Key Developments and Their Impact
On December 12th, President-elect Trump strongly endorsed the ILA, criticizing the USMX as foreign owners prioritizing profits over American workers. This came after a two-hour meeting with ILA President Harold Daggett.
Experts see this as a major blow to the USMX, with many predicting they will eventually concede to the union’s demands, lacking support from the incoming administration. Some expect a brief strike, while others believe negotiations on January 6th will lead to the USMX agreeing to delay automation for six more years under the current contract.
Others suggest the USMX may allow disruptions to escalate, using the turmoil to justify increased port fees, citing higher wages and the inability to automate operations.
Next Steps
In the event of a strike, supply chains could be significantly impacted. While a prolonged strike is not anticipated, please be aware that carriers have announced significant disruption surcharges for containers arriving on or after January 15th. Containers scheduled to arrive after this date may face these surcharges. Additionally, it’s worth noting that Chinese New Year is approaching.
