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Possible East Coast Port Strike Could Lead to High West Coast Volume

Possible East Coast Port Strike Could Lead to High West Coast Volume

June 25, 2024
ITS Logistics warns supply chain managers to keep close eye on the situation.

All markets have stabilized for ocean and rail container demand, according to a report from ITS Logistics released June 24. 

However, the company warns  supply chain professionals to be aware of “significant volumes entering the West Coast via Seattle-Tacoma and Los Angeles and Long Beach  and for inland point intermodal legs to be canceled.”

“Port and rail operations have normalized, and volumes have reduced due to extended dwell times for containers in Asia awaiting export,” said Paul Brashier, vice president of Global Supply Chain for ITS Logistics, in a statement.

“Despite this positive news, we are keeping a close eye on the current conditions, which could quickly change in the coming months due to the potential for International Longshoreman Association (ILA) strikes at US East Coast ports. The potential impact of these strikes on the US West Coast ports is a matter of concern. It's crucial for supply chain professionals to monitor this situation closely and be prepared for any potential disruptions.”

This month, the ILA, representing 85,000 port workers along the eastern seaboard and Gulf Coast ports, requested substantial wage increases for its members. The union, citing the high profits of container lines, suspended contract negotiations with the US Maritime Alliance (USMX), which represents employers at East and Gulf Coast ports.

The dispute centers around the automation of port operations, with ILA leadership setting a stern boundary with respect to remuneration in the new labor agreement due to begin on October 1.

According to reports, the ILA is vying for wage increases in excess of the 32% rise that the International Longshore and Warehouse Union (ILWU) obtained for its members at US West Coast ports last year, ITS Logistics said . This occurred during its six-year agreement with waterfront employers, and last summer, the ILA indicated that a 40% increase in both wages and benefits was secured by its Great Lakes district.

“The potential for ILA strikes at US East Coast ports could challenge that region if a deal is not reached this year,” continued Brashier. “This will drive volumes to the US West Coast as some shippers may hedge to avoid the US East Coast. Dwell times at origin in Asia for export have also increased significantly. While this is muting inbound volume and leading to improved port operations, at some point, ocean carriers and non-vessel owning common carriers will increase capacity to capture surging trans-Pacific rates.”

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