U.S. East Coast port strike becoming more likely

With an Oct. 1 strike looming, the International Longshoremen’s Association (ILA) says it will be on the right side of history should the union not reach an agreement with the United States Maritime Alliance (USMX) working at East and Gulf Coast ports.

Inside Logistics reported earlier in the month how a strike at U.S. East Coast ports would impact Canadian ports, with Frank Kenney, director of industry solutions at Cleo, an end-to-end supply chain integration software company, saying it would significantly increase traffic through the Port of Halifax and Port of Montreal due to their proximity to rail carriers.

“This makes them ideal for inbound and outbound freight. However, the challenge lies in moving goods in and out of Halifax, which often involves rail transportation through the Midwest of the United States, with Chicago as a major hub,” said Kenney. “Berthing at Port Newark in New York offers easier access to East Coast highways and rail systems, but Chicago lies 960 miles to the west, adding at least a day to move freight from there to key hubs in the east. The bottleneck is likely to occur at Port Huron, Mich. This combination of factors—added transit days, double border crossings, maritime operations in Halifax and rail in Huron—will not be optimal.

Kenney said he also expects maritime activity to surge in the event of a port strike, as manufacturers and retailers would look to stock up on goods ahead of a work stoppage and the Holiday season.

“The lingering volatility of the rail worker situation in Canada and the current U.S. election could also contribute to increased demand,” he said. “Depending on the diligence of retailers, we’ll feel the increase in costs but likely not the impact on merchandise availability.”

Everstream Analytics is also tracking how the strike could impact national supply chains.

Everstream said if a work-to-rule order is implemented after the expiration of the current contract, port workers could limit or partially halt port operations through restricting overtime work and engaging in spontaneous walkouts. While the effects would be less damaging than a full-scale strike, longer vessel queues and wait times would likely lead to increased congestion at affected ports, according to Everstream.

Everstream said a full-scale strike would have an immediate impact on cargo movements by increasing congestion on East and Gulf coast ports but also causing heavy diversions to U.S. West Coast ports or Canada.

“In the event of a strike, U.S. West Coast ports would almost certainly see an increase in congestion from the increase in diverted cargo flow. U.S. East and Gulf coast ports combined account for roughly 50 per cent of imported cargo, and West Coast capacity would quickly become inundated with the increased volume. This may lead to disruptions such as longer vessel waiting times, congestion in container storage yards and delays in rail operations in and out of affected ports,” said Jena Santoro, senior manager of global risk intelligence, Everstream Analytics. “In addition, the threat of work stoppages on the U.S. West Coast in solidarity cannot be ruled out. The International Longshore and Warehouse Union (ILWU) has pledged its backing to its East and Gulf Coast counterpart. While the ILWU has not outlined any specific actions it plans to take in support, solidarity strikes of any kind could prompt nationwide port disruptions and severe impacts on maritime trade with the U.S.

“Counts for waiting vessels at North American ports have steadily increased to the highest numbers recorded for this year. This is likely due to early diversions by shippers who are interested in preemptively avoiding disruptions from the looming strikes.”

In its most recent update on negotiations, USMX said it has made additional attempts to engage with the ILA to resume bargaining, but have been unable to schedule a meeting.

“We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time,” read the statement. “USMX has received outreach from the Department of Labor, the Federal Mediation & Conciliation Service (FMCS) and other federal agencies and we will keep them up to date on the status of negotiations. We would be open to working with the FMCS, as we have done successfully in the past, but that is only possible if both sides agree to mediation.”