Still No Progress in ILA and USMX Negotiations
It’s hard to believe, but there’s still no progress on the negotiations for a new contract between the ILA (East Coast Longshoremen) and the USMX (carrier association). The contract expires on September 30, just a few days away. ILA leaders are threatening to strike on October 1 unless their demands are met, including a big pay raise and stopping any new automation. They also want to roll back existing automation.
While I’m not siding with carriers or ports, a strike would be devastating, and is already taking a toll on global commerce and the supply chain. Ships sailing to the U.S. East Coast and Gulf ports can't turn back or switch to the West Coast. Those ships are stuck with thousands of containers and nowhere to unload. Sending them back to their origin ports so that they can be reloaded with product would create a massive backlog, similar to what we’ve experienced in past West Coast contract disputes.
The potential strike will have a profound impact on supply chains across the U.S., and businesses need to act fast to mitigate the damage. WOWL, a logistics management platform, can help you stay ahead of these challenges by offering real-time data, advanced planning tools, and expert guidance to navigate this crisis.
Disruptions Already Happening
The damage has already started. Some carriers are dropping containers at different East Coast ports than originally planned. For example, containers meant for Savannah and Norfolk are being dropped at Charleston and Wilmington, NC. Cargo owners may have to pick up their containers at these alternative ports instead of the ones listed on the bill of lading. If they don’t get their containers quickly, they could be stuck behind closed gates and picket lines for the duration of a strike!
The bottom line is that if you have containers ready for pickup, whether at
the correct port or an alternate port, you need to act fast. Get a dray carrier on it now or find a new carrier ASAP. Any container stuck behind picket lines will stay there until the strike is over, and even then, you’ll face long delays to move them.
With WOWL’s real-time tracking and integrated communication tools, you can quickly identify where your containers are and coordinate with dray carriers to get them out of the port before gates close. Having a clear picture of your supply chain will be critical in the days ahead.
Reefer Containers at Risk
If you have refrigerated containers (reefers), spoilage is a big concern during a strike. If the power fails, no one will be around to fix it, and the cargo will spoil quickly. It’s crucial to get those containers out as soon as possible.
Many ports and terminals have extended gate hours until the strike starts. Take advantage of this and get your containers moving now!
Exporting Containers?
Exporters face similar issues. Ships that are unloaded before a strike starts will leave with whatever containers they’ve loaded. If you’re exporting, try to get your containers in by September 28, and check with your carrier directly.
Logistics Providers: Time to Shine
This is your time to show your value and expertise to your customers. Are you really a logistics expert and a creative problem-solver focused on customer needs?
Take Action Before the Strike Hits
US East Coast & Gulf Westbound Surcharges: Several carriers, including Maersk, Hapag-Lloyd, CMA-CGM, and MSC, have announced new surcharges due to the expected strike. These charges range from $1,000 to $1,500 per TEU, depending on the carrier, with start dates from October 1 to October 21. Check your contracts to see if they protect you from these charges. We have to expect other carriers will join in the surcharge parade.
Tip: If your contract doesn’t have a "No New Surcharge" clause, consider adding one in the future. New surcharges should require approval from both you and the carrier.
Dropping Rates on Major Tradelanes: Despite the new USEC surcharges, rates are continuing to drop on major trade routes. The Golden Week holiday had little impact on stabilizing rates.
Air Freight Tightness: Air freight has been tight globally, with high rates due to new U.S. De Minimis rule changes. The potential USEC/Gulf port strike will likely push even more volume to air freight, causing rates to skyrocket further and more air capacity will be sucked into the US market away from other markets.
Preparing for the Aftermath
Both westbound and eastbound routes are already feeling the effects. Ships headed westbound may have no place to unload, or if the strike ends quickly, they’ll be stuck waiting behind earlier vessels to unload first. It has been only a few years since the last massive backup of ships outside the ports of New York, Norfolk, Savannah, and others.
Once these vessels unload and reload, they’ll leave for Asia, Europe, or other destinations late, causing further delays. This creates a ripple effect of congestion, a shortage of containers, and delays in the return of empty containers to Asia. It could take 5-7 weeks for things to return to normal. A strike of just one week could take six months to fix.
By the time you read this, the strike may be just days away. Whatever you’ve accomplished by then will help, but now is the time to plan for what’s next—prioritizing what’s most important and preparing for how to move the next set of orders.
Set Yourself Up for Success with WOWL
In times of uncertainty, it’s critical to have a logistics partner you can trust. WOWL is a logistics management platform that helps you manage your entire supply chain. Our team supports your external partners, carriers, NVOs, and forwarders, ensuring smooth communication and coordination. WOWL is built for times like these—labor disputes, pandemics, weather events, and more.
Whether you’re dealing with an impending strike or planning for future disruptions, WOWL is the solution that keeps your supply chain running smoothly. Be prepared for whatever comes next. Check out our demo and see how WOWL can help you manage future challenges and keep your logistics moving efficiently!
