For the first time in almost 50 years, nearly 50,000 members of the International Longshoremen's Association (ILA) initiated strikes at ports across the U.S. East Coast and Gulf Coast ports on October 1, 2024. The coastwide labor unrest is expected to disrupt U.S. supply chains for parts, components, and merchandise, including food products, that are typically entered through the impacted ports.
Why are there labor strikes?
ILA, which represents longshoremen on the Atlantic and Gulf Coasts, and the United States Maritime Alliance (USMX), an alliance of container carriers and port associations serving the U.S. East and Gulf Coasts, failed to reach an agreement on key issues, including wages and automation. The most recent labor agreement between these parties expired on September 30, 2024.
Which ports are impacted?
Approximately 36 ports from Maine to Texas are expected to be impacted. Major ports include Houston, Baltimore, and New York/New Jersey.
Will the White House intervene?
At this time, the White House is unlikely to intervene and has declined to invoke presidential powers under the Taft-Hartley Act of 1947 to impose a "cool off" period for labor negotiations between ILA and USMX.
What key considerations should industry stakeholders keep in mind?
Given the potential risk of widespread supply chain snarls, especially for ocean shipments, stakeholders are advised to consider the following:
- Understand what protections and liabilities arise from your contracts in the event the labor unrest disrupts your business operations or ability to perform.
- Monitor the developments in the ocean shipping sector, such as the implementation of new, additional surcharges, the treatment of demurrage and detention fees, and other responses from common carriers and marine terminal operators. Importantly, all applicable ocean shipping laws and regulations are in full force. Shippers should know what avenues for disputing charges are available, and regulated entities should ensure that they understand their regulatory obligations and are operating in strict compliance.
- Continue complying with all applicable laws and regulations administered and/or enforced by U.S. Customs and Border Protection (CBP) that are related to importing and exporting merchandise. Stakeholders must account for how the strikes may impede their ability to comply with certain requirements, including mandatory data transmissions. Advanced Qualified Unlading Approval (AQUA) Lane benefits for participants in the CBP Customs Trade Partnership Against Terrorism (CTPAT) will resume after the strike is concluded.
- Assess how these strikes may impact your current business operations and whether cargo diversion, delay of imports, or other alternatives are appropriate.
