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Due to the current situation on the transatlantic trade with various announcements about rate increases on the part of the shipping companies from 01.09.2024, we would like to discuss the potential effects of a strike and the current state of negotiations below.
What is the ILA?
Founded in 1864, the ILA (International Longshoremen's Association) is the US-American union of dockworkers at the ports on the east coast of the USA and Canada, the US Gulf Coast, the Great Lakes, Puerto Rico and inland ports in the USA. The union has been led by International President Harrold Dagget since July 2011 and currently has around 45,000 members.
What are the ILA’s demands?
The ILA is demanding a framework agreement that excludes any automation measures at the terminals. In addition to various other points, the ILA is also demanding salary increases of 76%.
What is the current status of the negotiations?
The current framework agreement expires on 30.09.2024. Negotiations between the ILA and the terminal operators have currently come to a complete standstill. Intervention on the part of the Biden administration or any other authority/body has been completely rejected by the ILA. ILA President Harrold Dagget is already threatening work stoppages from October 1, 2024. There will be internal ILA meetings on September 4 and 5, 2024. We expect further announcements from the union afterwards.
What can be expected in the event of a strike?
The strike at the affected terminals is expected to have a serious impact on supply chains in the USA. Depending on the duration of the strikes, it would take several months to return to a normal handling situation. For example, experts expect a one-week work stoppage to have a negative impact until November 2024 and a two-week work stoppage even into 2025.
What alternatives are there to shipping via US East and Gulf Coast ports?
The framework agreement only applies to US ports and therefore excludes dock workers at Canadian ports for the time being. It is of course possible that corresponding support strikes will be organized. Shipping via Canada could be an option, especially for the US Midwest. However, it is to be expected that there will be massive congestion in the event of a strike. There is a valid framework agreement for port workers on the US West Coast, which is why shipments via these ports are also an alternative. If necessary, routing via Mexico is also possible. Depending on the destination / origin, individual solutions can be found.
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