Dear Valued Partner,

We want to bring to your attention the ongoing labor negotiations between the International Longshoreman’s Association (ILA) and the U.S. Maritime Alliance (USMX). Following a brief work stoppage in early October, which caused significant disruptions at East Coast and Gulf Coast ports, including congestion, carrier surcharges, and carriers evoking force majeure, the parties returned to the bargaining table in mid-November. However, talks broke down on the second day due to disagreements over the expanded use of technology such as automation.

The current ILA-USMX labor agreement has been extended to allow negotiations to continue until January 15. While this extension temporarily averted an extensive strike in October, the possibility of another work stoppage grows more realistic as the deadline approaches.

Potential Supply Chain Impacts

If a new contract agreement is not reached by January 15, the consequences for supply chains could be significant. A few of the possible consequences are outlined below, each of which have downstream effects:

• Imports: Cargo destined for the nearly 40 affected seaports could be diverted, stranded at transshipment ports, or delayed on vessels anchored outside ports.
• Exports: Shipments scheduled to depart from impacted ports may face extended delays at rail yards, challenges with equipment availability, or inability to turn in loaded containers to an inland or marine terminal.
• Financial Impact: While the FMC discouraged carriers from charging detention and demurrage during the last strike, the FMC does not have jurisdiction over inland/rail terminals. Detention and demurrage are not the only financial considerations. A repeat of the October work stoppage could result in increased congestion, additional surcharges, and other unplanned costs that may affect your operations.

To mitigate potential disruptions, we recommend reviewing your import and export shipping plans for the coming month and exploring alternative routing options where feasible. Early coordination with your supply chain partners is critical to navigating this uncertain period effectively.

We are closely monitoring the situation and will continue to provide updates as more information becomes available. Should you have any questions or need assistance with contingency planning, please don’t hesitate to contact our team.

Thank you for your understanding and continued partnership.