by Manal Barakat, SeaNewsEditor
The latest announcement by the US Maritime Alliance (USMX) reveals that labour negotiations for US East and Gulf port workers have not progressed in the past few weeks.
“If the ILA is willing to meet, it is still possible to agree to terms on a new Master Contract,” said the USMX in its statement, which signals that the two parties have yet to sit together for talks.
While the possibility of a strike edges closer, maritime shipping experts and analysts remain busy weighing the consequences of such strikes. In an HSBC report, analysts estimate the strike could affect over 50% of US containerised cargo imports and 15% of the global container fleet.
Port and intermodal operations
The strikes, which could take place as early as 1 October, are also expected to close five of the 10 busiest ports in North America, including the ports of New York and Charleston.
Furthermore, operations at the ports in Wilmington, North Carolina, and Savannah, Georgia, which have hybrid work patterns and employ both union and non-union workers, may be significantly impacted.
Freight Waves reports that in the hybrid model, ILA members handle the remaining longshore labour while non-union workers use lift machinery to load and unload containerships.
A port authority representative on the East Coast told the Journal of Commerce (JOC) that meetings are currently in place to discuss “an orderly wind down” of operations in case a strike takes place.
While some non-port activities that do not require ILA workers, such as inland rail ramps, may continue to operate, port closures will significantly reduce rail services.
Other operations, such as container and chassis depots employing ILA members, may also be impacted.
The JOC reports that the Metropolitan Marine Maintenance Contractor’s Association, representing container and chassis depot operators at the Port of New York and New Jersey, has already an agreement in place with the local ILA union for chassis and container maintenance workers.
It is still unclear, however, if ILA maintenance employees will cross ILA dockworkers' picket lines.
Port operators and ocean carriers
According to a JOC source, there has been talk about extending gate hours for the pickup of import boxes until the strike and setting deadlines for accepting exports or empty containers. The port authorities and the local union are also negotiating how to temporarily keep reefers at the port.
Carriers, on the other hand, are already diverting cargo to the West Coast, says a Shipping Watch report. Danish carrier Maersk wrote last week that a strike could cause delays of 4 to 6 weeks.
“If a strike occurs, imports from Asia could still divert to the West Coast, but we think this would strain the port and landside cargo evacuation infrastructure. However, imports from Europe and Latin America would likely be stranded as the Atlantic side ports in Canada and Mexican ports are less equipped to handle the spillover,” writes the HSBC report.
US railroads "able to handle disruption"
According to the CEOs of CSX Transportation and Norfolk Southern (NS) Railway in the US, the railroads believe they are prepared for the potential strike. They claim that there is minimal risk over an extended period because cargo will still need to reach population centers, even if it moves to the West Coast.
In a recent conference, CSX CEO Joe Hinrichs said a large portion of the cargo that arrives at East Coast ports is trucked straight to major cities. This implies that any port closures could increase the volume of goods from the West Coast that need to be railed to cities in the CSX intermodal network.
Similarly, NS CEO Mark George commented that the railroad had shown agility when the products moved to the East Coast during the ILWU strike. "We [will] handle that just fine, too,” he added.
