As of 12:01 a.m. ET on October 1, 2024, the International Longshoremen’s Association (ILA) has initiated a labour strike, impacting port operations across the U.S. East and Gulf Coasts. This strike has led to severe disruptions in cargo movement, terminal closures and transportation delays, with both sides currently at a standstill in negotiations. The ILA is firm in its demands and refuses to consider any proposals that do not meet all their conditions.
The Scope and Impact of the Strike
The strike is affecting 26 ports along the U.S. East and Gulf Coasts, causing significant backlogs and delays in vessel operations. Numerous vessels are drifting or anchored at various ports, and these numbers are expected to increase in the coming days:
Houston: 0 vessels drifting/anchored (30/09) → 2 vessels (01/10)
New York/New Jersey: 4 vessels (30/09) → 7 vessels (02/10)
Norfolk: 4 vessels (30/09) → 9 vessels (02/10)
Charleston: 2 vessels (30/09) → 6 vessels (02/10)
Savannah: 10 vessels (30/09) → 14 vessels (02/10)
In response to the strike, some vessels have slowed their routes to avoid being anchored for extended periods, and there are considerations to reroute to West Coast ports. However, no carriers have yet committed to such diversions.
Force Majeure and Shipping Impacts
With no immediate resolution in sight, many carriers have declared force majeure, relieving themselves of liability for service disruptions caused by events outside their control, such as this strike. This declaration allows carriers to implement additional charges to cover costs associated with delays, rerouting or other operational challenges.
The force majeure declarations and ongoing strike have created a ripple effect throughout the supply chain, affecting not only port operations but also downstream logistics, including rail and truck transport. Many shippers are left in a difficult position, as the uncertainty surrounding the strike’s duration continues to disrupt delivery schedules and increase costs.
U.S. Government Response and Concerns Over Price Hikes
The U.S. Department of Transportation has expressed concern over the potential for opportunistic pricing by shipping companies amidst the strike-related disruptions. Secretary Pete Buttigieg issued a statement on Tuesday, warning against companies exploiting the situation for profit:
“Our administration is calling on ocean carriers to withdraw their surcharges. No one should exploit a disruption for profit, especially at a time when whole regions of the country are recovering from Hurricane Helene. We are closely monitoring potential supply chain impacts and assessing ways to address potential impacts, if necessary.”
The government’s focus on potential price hikes highlights the broader economic implications of the strike, particularly as businesses and consumers alike struggle with recovering from recent natural disasters and other market challenges.
Compounding Issues: Canadian Port of Montreal Experiences Disruptions
Adding to the strain on East Coast shipping, the Port of Montreal in Canada has also been affected by labour disruptions. While not as impactful as the 26 U.S. ports currently under strike, the Port of Montreal conducted a work stoppage at two of its five terminals earlier this week. The Viau terminal, which primarily handles MSC services, and the Maisonneuve terminal, which manages MSC, OOCL and Hapag Lloyd operations, have both experienced slowdowns.
The Canadian government has shown no intention to intervene, leaving union negotiations to continue independently. While the situation in Montreal is expected to stabilise shortly, there is a risk of further disruptions if the strike spreads to additional terminals.
Shippers Call for Government Intervention
With the ILA strike showing no signs of resolution, shippers are urging the government to step in and facilitate renewed negotiations between the United States Maritime Alliance (USMX) and the ILA. Prolonged disruptions pose significant risks to industries reliant on timely deliveries, with impacts extending from retail to manufacturing.
Many stakeholders are frustrated with the lack of progress and are concerned that continued delays could create a severe bottleneck in the supply chain, further complicating the movement of goods across the country.
How Airmark Can Help
While the labour strike and subsequent force majeure declarations have created an unpredictable shipping environment, Airmark remains committed to supporting its customers. We will continue to keep customers informed as the situation evolves and will work diligently to provide updates. We are actively exploring alternative routes, ports and transportation options to ensure that your shipments experience as little disruption as possible.
If you have any questions or concerns about how the strike may impact your shipments, please reach out to our team.
