After negotiations with the USMX regarding the current contract extension, ILA reached a tentative agreement. The extension ending on January 15th would have resulted in a potential strike, significantly impacting shipping. In a joint statement on January 8th, the two parties announced that they would continue to operate under the current extension for the next six years. They also will meet with the Wage Scale Committee to ratify the final terms of the agreement. Over the past year, the ILA has protested against port automation and for better employee wages. In particular, a wage increase similar to that the West Coast ILWU dockworkers received in 2022.
In October 2024, tensions from failed negotiations rose, resulting in a port protest across East and Gulf Coast ports. The strike lasted three days and ended on October 4th with a contract extension. A 61.6% pay rise and a 4$ hourly wage increase over the next six years were parts of the extension. However, the extension would have expired on January 15th until the ILA and USMX reached a contract agreement. Along with increasing wages for dockworkers, the new contract allows room for port automation. A primary concern has been the increased usage of semi-automated cranes at ports since it threatens job security. The USMX believes that it will add jobs instead.
What Should Shippers Know As The ILA Reached A Tentative Agreement?
As the new deal comes into place, the worry about moving cargo will diminish in the industry. A potential strike would have significantly impacted the shipping industry due to the ILA’s size. The International Longshoremen’s Association (ILA) is a union of over 45,000 employees across 36 ports. The previous strike on October 1st resulted in a daily loss of billions of dollars. It also disrupted supply chains for goods moving into and out of the U.S. Shippers began importing cargo through other locations like West Coast ports. With shippers relying on trucking to move freight to and from ports, a protest would directly affect domestic shipping.
How Does This Impact Domestic Shipping?
Along with the international cargo movement, domestic shipping would have felt the impact of a potential strike. Most supply chains that ship cargo in and out of the U.S. use trucks for first and last-mile logistics. For example, an importer from China may use a truck to take a container out of a port. This is known as drayage services, which is a short-distance movement of goods over different modes of transport. A typical example is importing cargo into a port by vessel and then transporting it by truck. When a port abruptly stops operating, it also leads to severe backlog as containers start piling up.
The backlog can extend transit times for truckers since it delays the loading and unloading of the container. As a result, carriers may increase transportation costs, which the customer could feel. Domestic industries that rely on raw materials from other countries could also feel the impact of a port shutdown. With a tentative agreement preventing a potential strike, shippers may find it ideal to begin shipping. With first and last-mile logistics typically relying on trucks, speaking to a freight broker can be beneficial when starting. Contact A1 Freight Solutions at 786-375-9420 or Info@a1wwl.com to ensure your shipment’s success. We have numerous solutions for navigating situations that can disrupt your shipment and get your goods to the final destination.