News / Forwarders warn shippers to expect a second ILA-USMX work stoppage

© Md Nayemul Islam |

There was widespread relief that the work stoppage at US east and Gulf coast ports at the beginning of October was called off after three days. While it has taken some time to clear the congestion at afflicted ports like Savannah, this was nothing like the system-wide paralysis that had been widely predicted if the strike had been allowed to go on.

Beyond the immediate relief of facing a peak season without massive disruption on top, shipper reactions vary, from a sense that a second stand-off between union and port employers in January would not pose a huge threat, to worries that the issue will flare up again, and likely last much longer, with heavy repercussions for traffic flows.

“Many of our customers are not very concerned that a second stoppage will happen,” reported Bob Imbriani, SVP international of forwarder Team Worldwide, adding that a long succession of work stoppage threats over the past couple of years in the US and Canada had left cargo owners somewhat jaded on the issue.

The outcome of next week’s US election is also a factor; Donald Trump is seen to be more likely to intervene in a strike if he were to return to the White House in January, Mr Imbriani noted.

The fact that the annual spike in traffic associated with Chinese New Year will fall into the same window as a potential port showdown is viewed as a minor concern, as most traffic headed to the US east coast does not originate in China, noted Dave Minnebach, VP global ocean commercial development of AIT Worldwide Logistics.

But, unlike many of their customers, executives at Team Worldwide see a strike in January as a major concern.

They are bracing for an extended confrontation over the issue of automation, which is bound to result in a reduction of labour at the ports. The employers have said they intend to address this through attrition rather than layoffs, Mr Imbriani noted. This may make the issue less threatening for individual workers, but for the union it is an existential issue, as a reduction of its numbers over time would diminish its standing, he said.

“We try to get customers to understand the urgency,” he added.

Some shippers do expect a longer, and more disruptive, stand-off in January.

“Based on comments from a selection of AIT customers and ocean carrier partners, stakeholders are expecting = a work stoppage at US east and Gulf coast ports will indeed take place in January. Additionally, the consensus seems to be that if there is another strike, this time it is likely to be much longer before work is resumed,” Mr Minnebach said.

Some shippers, such as Levi Strauss and Newell Brands, have taken steps to secure their inbound flows, notably by routing some, if not all, of their waterborne imports through west coast gateways.

Gene Seroka, executive director of the port of Los Angeles, said he had not heard of any cargo owners that shifted imports to California in preparation for the strike in October. But Mr Minnebach commented that some cargo owners were actively exploring contingencies, such as re-routing cargo through Canadian ports.

This had been an option Team used in October – only to find the port of Montreal facing a strike as well (which lasted one day, but it took Canadian National two days to resume rail traffic), Mr Imbriani said. Team has dusted off the contingency plans it for October, but has added to the options, mindful of the Montreal experience – and Montreal dockworkers are now on strike again.

“There are not a lot of options if you take out the east coast and part of the Gulf coast,” Mr Imbriani said.

A second trend observed by Mr Minnebach was importer efforts to speed-up shipments in order to adjust their inventories in advance of a work stoppage, which was said to have produced the early peak season in container traffic this summer.

“We’re talking to a few customers about bringing in their cargo early,” Mr Imbriani said. “It’s a bit difficult, because now everybody is busy with peak season. It’s not the best time of the year to look at increasing your inventory.”

But the window for action is not very big, he warned, noting that some traffic is on the water for 30 days.