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Shipping lines are adjusting their services following the strike of tens of thousands of International Longshoremen’s Association members at ports in the US East and Gulf coasts
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The strike commenced on October 1 with ILA members seeking significantly higher wages and voicing concerns on automation
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US President Joe Biden has asked representatives of shipping companies to “negotiate a fair contract with the longshoremen”
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Adjustments, including service suspensions, may be expected, according to shipping lines
Shipping lines are adjusting their services following the strike of tens of thousands of International Longshoremen’s Association (ILA) members at ports in the US East and Gulf coasts, which handle about half of all goods shipped in and out of the US.
The ILA is demanding higher wages and a total ban on the automation of cranes, gates, and container-moving trucks used to load and unload freight.
West Coast workers are not included in the strike as they belong to a different union.
A drawn-out strike would force businesses to pay shippers for delays and cause goods to arrive late for the peak holiday season. Deliveries of such goods as toys, Christmas trees, cars, coffee, and fruit, among other, would be affected.
Noting the constantly evolving situation, shipping lines said the strike will certainly disrupt operations at terminals and impact cargo movement but that contingencies are in place, including provision of inland routing on some sectors.
On October 1, ILA members walked out of 14 major ports along the East and Gulf coasts, stopping container traffic from Maine to Texas, the first such shutdown in almost 50 years.
Talks between the ILA union, representing 45,000 port workers, and the United States Maritime Alliance (USMX), representing shipping firms, port associations and marine terminal operators, for a new six-year contract broke down ahead of a midnight Monday deadline. The port workers are employed in container and roll-on/roll-off operations.
ILA in a statement said it rejected USMX’s proposal, saying it fell “far short of the demands of its members to ratify a new contract”.
USMX for its part said: “Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation and recognizing the ILA’s hard work to keep the global economy running.”
Biden sides with dockworkers
If deemed a danger to US economic health, US President Joe Biden may seek a court order for an 80-day cooling off period under the 1947 Taft-Hartley Act.
Thus far, he has said that he does not plan to exercise such power, as he said he believes in collective bargaining to resolve labor issues.
In a statement, Biden urged “USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback.”
He said: “Ocean carriers have made record profits since the pandemic and in some cases profits grew in excess of 800 percent compared to their profits prior to the pandemic. Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates. It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.
As our nation climbs out of the aftermath of Hurricane Helene, dockworkers will play an essential role in getting communities the resources they need. Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits. My Administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board.”
Adjustment in shipping schedules
Hapag-Lloyd in a customer advisory on October 1 said the “situation is impacting the movement of import and export containers, affecting our operations, including the loading and unloading of containers.”
As the situation is beyond its control, Hapag-Lloyd said it will “need to adjust services or temporarily suspend operations as conditions evolve.”
The situation is fluid with the impact on operations subject to change without notice, it added.
Also on October 1, Maersk in an advisory said its teams have mapped out vessel-level contingencies that will be rolled out depending on the duration of the labor dispute.
Maersk said it can provide contingency inland routings from West Coast port locations in select East Coast markets.
Meanwhile, it advised to “hold all empty containers until the labor disruption has ceased”, adding that at this time, it does not have alternative empty depots planned.
The carrier noted the “situation is constantly evolving, and details may change accordingly.”
Yang Ming on October 1 noted the “work stoppage constitutes a force majeure event as defined or described by applicable tariffs, service contract terms, and bills of lading (including waybills) of Yang Ming Joint Service Agreement.”
Yang Ming said it expects likely disruption at affected marine terminals, ports of call, and inland points during the work stoppage.
“While Yang Ming will do its best to minimize impact to our service, our customers should expect widespread service interruption, including but not limited to, suspension or cancellation of bookings, non-delivery of cargo, and complete or partial closure at affected facilities, including marine terminals, railroad ramps, and equipment depots,” it stated.
The carrier said it will do its best to maintain vessel movement and cargo flow and may exercise its rights under its bill of lading or tariff provisions to conduct operations during the strike.
“Any extra costs incurred for handling, rehandling, use of alternate ports, use of alternate modes of transport, utilization of services of third-party vendors, or any other cost or expense related to the work stoppage will be for the account of the shipper/receiver,” Yang Ming said. “Demurrage and detention charges that do not comply with applicable law will not be assessed.”
COSCO Shipping has also declared the situation a force majeure for all cargo to and from the affected regions in accordance with Clause 20 of its bill of lading.
“We are actively arranging alternative routes and services and are doing our utmost to continue ensuring the security of your supply chain,” it said.
The Chinese carrier will continue to accept bookings for the US East Coast and Gulf Coast but due to uncertainties caused by the strike, bookings may be adjusted to other vessels or canceled.
It said it reserves the right not to accept reefer and dangerous goods shipments through the affected ports.
Since the terminals on the US East Coast and Gulf Coast are currently closed, COSCO recommends that customers complete customs clearance in advance to expedite cargo pickup when the terminals reopen.
To mitigate supply chain disruptions caused by the strike, COSCO likewise recommends that customers consider using other ports or transportation methods.
MSC in a customer advisory as early as September 26 said that in the event of port strikes, it is ready to assist customers in exploring options through alternative routes, transport modes, or distribution schedules.
The carrier will provide operational guidance regarding its temporary policies for US cargo bookings, as well as its policies for demurrage, detention, and per diem charges for all cargo bookings on or after October 1, to or from any US East and Gulf Coast ports.
