As we approach peak season 2024, will the labor negotiations at East and Gulf Coast ports cause holiday headaches? Or will they quickly become yesterday’s news? In this article, we’ll review an article from Supply Chain Brain which warns that a bumpy ride may lie ahead. And, if that is indeed the case, we’ll examine why staying close to your 3PL provider could be vital.
The article from Supply Chain Brain discusses the growing likelihood of a strike by the International Longshoremen’s Association (ILA) at Atlantic and Gulf Coast ports, as negotiations with the United States Maritime Alliance (USMX) remain stalled. The current contract is set to expire on September 30, 2024, and with less than two months remaining, ILA President Harold J. Daggett expressed concern that a new Master Contract has yet to be negotiated, making a strike on October 1 increasingly likely.
The negotiations have faced significant setbacks, particularly after the ILA canceled talks with USMX in early June 2024. This decision was driven by the discovery that APM Terminals and Maersk Line were using an Auto Gate system that processes trucks autonomously, bypassing ILA labor. This system, which was first identified at the Port of Mobile, Alabama, is reportedly being used in other ports as well, raising concerns within the union about job security and the encroachment of technology on their jurisdiction.
The union has also been waiting for the results of an audit on jobs created by new technology, a report that has been delayed for almost two contract periods. The presence of increasing numbers of IT personnel on marine terminals has further fueled concerns, with the ILA viewing this as an infringement on their work areas by APM and Maersk’s IT departments in Charlotte, North Carolina.
ILA members have expressed strong support for Daggett, indicating a willingness to strike if their contract demands are not met. Daggett emphasized that the union is not interested in extending the current contract or involving external parties, including the Biden Administration and the Department of Labor, in their negotiations with USMX.
Staying close to your 3PL partners during the ongoing ILA and USMX contract negotiations is crucial for several reasons:
The possibility of a strike at Atlantic and Gulf Coast ports could lead to significant disruptions in supply chain operations. If the ILA proceeds with a strike on October 1, it could halt cargo movement across these key ports, causing delays and backlogs. By maintaining close communication with your 3PL partners, you can proactively plan for alternative logistics solutions.
3PL partners often have the flexibility to adapt quickly to changing circumstances. By staying engaged with them, you can ensure that contingency plans are in place, whether that means securing additional warehouse space, adjusting transportation modes, or working with alternative carriers. This level of preparedness can mitigate the impact of any disruptions caused by the labor negotiations.
Your 3PL partner can provide real-time updates on the situation, helping you make informed decisions. As negotiations evolve, having up-to-date information on port conditions, labor actions, and shipping timelines will be crucial in adjusting your logistics strategy to minimize disruptions.
In times of uncertainty, strong relationships with your 3PL partners become even more valuable. By working closely with them during these negotiations, you not only ensure smooth operations but also strengthen your partnership. This collaborative approach can lead to more favorable terms and greater operational support in the future.
Disruptions in logistics can lead to financial penalties, increased costs, and loss of customer trust. By closely monitoring the situation with your 3PL partner, you can take steps to minimize these financial impacts, such as renegotiating contracts or finding cost-effective alternatives.
At Kanban Logistics, we regularly handle freight coming into the Port of Virginia and the Port of Wilmington, NC. Contact us today and let us help you address your near-term challenges and long-term strategies.