Client Advisory: ILA Strike at East & Gulf Coast Ports – Updated October 3

WHAT’S THE LATEST

On October 1, roughly 25,000 International Longshoremen’s Association (ILA) union members across US East and Gulf Coast ports went on strike as they were unable to reach a new labor agreement with the United States Maritime Alliance (USMX).

Update as of 10/3: There continues to be no active bargaining between the ILA and USMX; however, port owners have signaled their openness to resume negotiations.

WHAT WE KNOW

• As of 10/2, at least 45 container ships remain unloaded at US East and Gulf ports, up from just three vessels before the strike began.
  • About 64 container ships were scheduled to arrive at one of the 15 affected ports.
• Major ocean carriers, such as CMA CGM, ONE and APL, have declared force majeure and may charge additional shipping fees for delayed vessels.
• Capacity will remain abundant this week and next, with vessel utilization departing Asia staying around 50%.
• The strike is the first East Coast dock strike since 1977, closing 14 major ports from Maine to Texas, including: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.
• West Coast ports are open.
• A strike may 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.
• For every week the strike continues, Oxford Economics analysts anticipate it would cost the economy $4.5 billion to $7.5 billion.
  • Additionally, analysts estimate more than 105,000 works across the ports could temporarily lose their jobs.
• In a statement shared by the White House on 10/1, President Biden and his administration are closely monitoring the strike, but believe collective bargaining remains the most effective path toward resolution.
• Depending on the length of the strike, it may result in shortages of consumer and industrial goods, cars and auto parts, raw materials, food shipments and pharmaceutical products, which could then lead to potential price increases.
  • Perishable products may see the most immediate effects of the strike.
    • According to the American Farm Bureau Federation, the affected ports handle 75% of the country’s banana imports.
    • About 80% of imported beer, wine, whiskey and scotch arrive to the US in containers at these ports.
  • However, consumers are not likely to be impacted by the strike right away as many companies have prepared by diverting shipments to West Coast ports or importing goods earlier than usual.
• As a result of the 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 are expected to face delays but may be manageable short term.
  • Trucking and rail transportation are impacted and may lead to higher costs and longer delays.
• The ILA confirmed that cruise ship operations are unaffected by the strike, and military shipments will continue.

WHAT'S NEXT?

As your logistics partner, we are ready and able to pivot quickly. Our team is monitoring the situation and working with clients directly to address their specific needs.

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 hello@sekologistics.com.