US East coast port strike looms as White House declines plea to step in

Ocean carriers and port employers are urging the International Longshoremen’s Association (ILA) to return to contract negotiations in an effort to avoid a potential strike across East and Gulf Coast ports, as the White House rejects plea by 177 trade associations to use legal powers. 

A strike at U.S. East and Gulf Coast ports appears imminent after the White House confirmed it won’t intervene legally. Following a letter from 177 trade associations urging action if negotiations with the ILA stall, the terminal employers’ group, USMX, welcomed the call for the government to help resume talks.

Trade groups warned a strike would harm the economy, especially with inflation falling. Despite USMX’s disappointment over stalled negotiations, the White House ruled out using the Taft-Hartley Act to delay the strike, encouraging both parties to negotiate.

The ILA rejected the latest wage offer from the USMX, considering it insufficient, particularly due to the unpredictable working hours of longshore work. The union is also pushing for stricter prohibitions on automation, demanding a ban on both semi-automation and full automation at marine terminals.

In addition to automation, the ILA raised concerns about the use of surveillance equipment, such as in-equipment cameras, which they claim infringes on worker privacy. They argue that this technology contributes to a hostile work environment, particularly affecting female longshore workers.

As the strike threat looms, transatlantic shipping rates are experiencing an unexpected surge, surpassing February’s peak. While many east-west container trade routes have seen declining rates, the North Europe to US East Coast trade route has bucked the trend, with a 16% increase in rates week-on-week.

There was speculation that the impending strike contributed to the rate spike, with European shippers rushing to move goods ahead of the 1st October deadline. However, much of the price rise can be attributed to peak season surcharges implemented by carriers at the beginning of September.

MSC has already announced plans to impose an Emergency Operations Surcharge from the start of October, further driving up rates. Shipping analysts suggest that even if the strike is short-lived, lasting around a week before government intervention, the ripple effects will push rates higher and create significant disruption for shippers across the Atlantic.

We have contingency plans in place to avoid the ports likely to be most affected by strikes, as well as alternative routes and entry points.

To discuss these issues and how Metro can protect your supply chain, please EMAIL Andrew Smith, Chief Commercial Officer.