As the maritime industry prepares for its busiest time of year, a threat of a strike looms over the East Coast ports. Earlier this week, the members of Local 1804-1 (New Jersey) of the International Longshoremen’s Association (ILA) granted authority to its president to recommend a union strike. This vote was in reaction to a break down in contract negotiations between the ILA and the U.S. Maritime Alliance (USMX), which represents steamship lines and terminals that employ ILA union members.
With rising costs and increased global competition, the USMX stand point is that shippers need to improve productivity by eliminating inefficiencies within the port itself. On the other hand, the ILA is worried that the automation process will in effect eliminate jobs within the ports and terminals. With 75% of shippers polled stating that a strike is “likely”, more than half have already begun putting together contingency plans just in case. Many shippers will eat the added costs and shift imports to the West Coast to prevent shipment interruptions, which gives the ILA very little leverage in negotiations.
However, what is unknown is how far reaching the ILA union strikes can become. With rumblings already occurring in Savannah, Georgia, it remains to be seen how many ports would be affected by a union wide strike. With the union threatening to walk off their jobs on September 30th, there is only a solid month of negotiations that can take place before a strike is ordered. Stay tuned for updates.