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Forwarders caution shippers to prepare for a potential second work stoppage by the ILA and USMX

Relief spread widely when the early October work stoppage at U.S. East and Gulf Coast ports ended after three days, easing fears of a prolonged disruption. Although ports like Savannah experienced some lingering congestion, it was manageable compared to the system-wide paralysis that could have unfolded had the strike persisted.

Now, as peak season approaches, shippers are mixed in their reactions. Some believe a potential January standoff between the union and port employers poses minimal risk, while others worry that renewed conflict may lead to a longer, more impactful disruption to cargo flows.

“Many of our customers aren’t overly concerned about a second stoppage,” stated Bob Imbriani, SVP International at forwarder Team Worldwide. Imbriani noted that after facing numerous work stoppage threats in recent years across the U.S. and Canada, many cargo owners are somewhat desensitized.

The outcome of next week’s U.S. election could also be influential; Imbriani pointed out that Donald Trump, if re-elected, might be more inclined to intervene should a strike materialize in January.

Additionally, while the potential work stoppage coincides with the annual shipping surge for Chinese New Year, Dave Minnebach, VP of Global Ocean Commercial Development at AIT Worldwide Logistics, remarked that this is only a minor worry, as most U.S. East Coast imports do not originate from China.

However, Team Worldwide’s executives view a January strike as a serious concern, particularly as the dispute centers on automation. Port employers have proposed reducing labor through attrition rather than layoffs, which could mitigate individual job loss but represents an existential threat to the union as its workforce shrinks over time.

“We try to convey to our customers the urgency of this issue,” Imbriani added.

Several shippers are bracing for a more severe standoff in January. AIT Worldwide Logistics reports that feedback from shippers and ocean carriers suggests another work stoppage could last much longer, potentially disrupting operations significantly. Companies like Levi Strauss and Newell Brands have proactively rerouted some imports through West Coast ports to safeguard their supply chains.

Gene Seroka, Executive Director of the Port of Los Angeles, mentioned he hadn’t observed any major cargo shifts to California in anticipation of October’s stoppage. However, Minnebach observed that some shippers are considering contingencies, such as routing cargo through Canadian ports, despite the challenges posed by a recent brief strike at the Port of Montreal.

“There aren’t many alternatives if East Coast and Gulf Coast ports are unavailable,” Imbriani observed, noting Team Worldwide has expanded contingency options after the Montreal experience.

A second trend Minnebach highlighted is that importers are expediting shipments to adjust inventories ahead of any disruption, which contributed to an early peak in container traffic this summer. Imbriani confirmed that some customers are discussing advancing shipments, though it’s a challenging request during the already-busy peak season.

But time is tight, he cautioned, as certain shipments can take 30 days on the water, leaving limited opportunity to adjust.

Source: The Loadstar