① The global transportation industry is facing a new risk this week: Dockworkers at ports along the east coast and Gulf of Mexico in the USA may hold a large-scale strike. ② If the union initiates the strike in early October, it will coincide with the peak shipping season for US holiday containers and the critical period before the US election, which is likely to have an impact on domestic politics and global trade security in the USA.
The global freight rate has remained high in recent days, as the Red Sea crisis has yet to be alleviated. However, the global shipping industry faced a new risk this week: the dock workers' union at ports along the US East Coast and the Gulf of Mexico announced the cancellation of talks with management, which means there is an increased risk of large-scale strikes by these port workers in the future.
US East Coast union threatens strike
The International Longshoremen's Association (ILA), which is the largest maritime labor union in North America representing 85,000 dockworkers along the East Coast, Gulf of Mexico, Puerto Rico, the Great Lakes and major US riverbanks. Six of the top 10 busiest ports in the US are governed by the union.
On September 30, the contract for more than 45,000 dockworkers under the union will expire, and the remaining negotiation time is less than four months. These workers come from 36 ports across the United States from Maine to Texas.
However, on Monday, the ILA canceled its scheduled talks with US Maritime Alliance (USMX), one of whose members, the world's second-largest shipping company, Maersk, used an automated system to handle truck operations at the Mobile port in Alabama without any workers.
The union said that Maersk's actions violated the parties' previous agreements and aimed to "eliminate job opportunities for union workers through automation." Therefore, they chose to cancel this week's talks.
Harold Daggett, president of the International Longshoremen's Association, warned that if an agreement cannot be reached before the current contract expires, union members will go on strike. He has already reminded workers in important trade centers such as New York, New Jersey, and Houston to prepare for the strike on October 1.
May cause huge impact
In the United States, port labor strikes are not common. In fact, since 1977, ILA and USMX have signed 10 labor contracts, ensuring that there has never been a interruption in port services over the past few decades.
However, if the contract negotiations are unsuccessful, the impact will be enormous. Because in the current global shipping tension, once the loading and unloading related work at the port slows down or stops, it will affect the smooth transportation of a large number of goods ranging from food and pharmaceuticals to factory equipment, thereby impacting the global supply chain.
Moreover, if the union launches a strike in early October, it will coincide with the peak season of US holiday container transportation and the critical moment before the US presidential election. At that time, the large-scale strike is likely to have an impact on both the domestic political situation of the United States and global trade security.
Gene Seroka, executive director of the Port of Los Angeles, was still trying to downplay the impact of the International Longshoremen's Association's cancellation of talks this week, saying, "There are always stops and starts in these negotiations."
However, he also acknowledged that some shippers have transferred "a small amount" of goods from East Coast and Gulf of Mexico ports to Los Angeles in advance to avoid the risk of strikes at East Coast ports.