News / Shippers eye Canadian ports as US east coast strike 'looks certain'

Port of Jacksonville. Photo: US Army Corps of Engineers.

A US east and Gulf coast port strike “looks certain” for 1 October, as talks between the International Longshoremen’s Association (ILA) and employers the US Maritime Alliance (USMX) flounder over wages increases and terminal automation.

Last week, the USMX said: “While there are fewer than three weeks remaining until the expiration of our current agreement, if the ILA is willing to meet it is still possible to agree to terms on a new master contract.

“We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that will be detrimental to both sides.”

However, as noted in this recent Loadstar Premium article, the ILA remains steadfast in its decision to conclude local negotiations before the master contract. And with many local dock workers and employers still at an impasse, including at Jacksonville, Tampa and Philadelphia, a new master agreement before 1 October is unlikely.

Shipping analysts at Linerlytica noted today that the strike “now looks certain”. It added: “The 14 ports controlled by the ILA handled 28.4m teu of containerised cargo in 2023, almost 550,000 teu each week. For each week the strike continues, it would hold up 1.7% of the global containership fleet.”

As well as wages, the main point of contention between dockworkers and employers is port automation.

ILA executive VP Dennis Daggett said in an interview with the International Dockworkers Council yesterday: “We have a strong stance against automation. Certain technologies we support because they make the job more efficient… as long as a human being is performing that job. But we’re completely against any type of robot taking over an actual human being’s job.

“Our fight against automation will be a constant battle for the rest of our lives. They’re going to try to figure out different ways to pay off the existing workforce, but we can’t allow that, we can’t fall for that… we’re going to push back in every country.

“We’re going to win, there’s no question,” added  Mr Daggett.

However, Lars Jensen, CEO of Vespucci Maritime, warned that the ILA’s “single-minded focus on banning automation” would make US imports more expensive, US exporters less competitive on global markets and would hinder efficiency improvements.

“If you were a shipping line, where would you prefer to deploy your best and most cost-efficient vessels? On services using high-efficiency ports, which leads to less time in port and more time moving cargo, or less-efficient ports where your valuable vessel sits still for longer than necessary?”

He added: “If ‘win’ means keep the US locked in the past century while the rest of the world has moved on, that type of win will indeed be costly for the US in general.”

Meanwhile, Frank Kenney, director of industry solutions at systems integrator Cleo, said he anticipated a significant increase in traffic through the Canadian ports of Halifax and Montreal in the event of a strike, “primarily due to their proximity to rail carriers, making them ideal for inbound and outbound freight”.

However, he warned that the “challenge” would be moving goods in and out of Halifax, which often involves rail transportation through the US Midwest, with Chicago as a major hub.

“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,” Mr Kenny explained.

“The bottleneck is likely to occur at Port Huron in Michigan,” he added. “The combination of factors – added transit days, double border crossings, maritime operations in Halifax  and rail in Huron – will not be optimal.”