Pending Longshoremen's strike could severely disrupt East Coast port operations. Supply Chain decision-makers should be prepared to develop alternative shipping strategies.
The International Longshoremen’s Association (ILA) contract with the United States Maritime Alliance (USMX) of shipping companies is set to expire at the end of September, and they have yet to reach a new contract agreement. Failure to do so is expected to result in a strike of up to 45,000 dockworkers on October 1st, potentially impacting up to three dozen ports across the East Coast and Gulf of Mexico. A strike may significantly delay delivery dates and increase prices for equipment, materials, and supplies.
Key Points:
- U.S. East Coast and Gulf Coast ports handle 43% of U.S. imports and move billions of dollars' worth of goods each month.
- ILA leadership described the Association’s relationship with port leaders as “pretty fragile.” They will “most definitely hit the streets on Oct. 1 if we don’t get the kind of contract we deserve.”
- A one-week strike in October is projected to create a backlog that would take four to six weeks to clear. A two-week strike would extend the recovery period into 2025. Delays could be compounded by the recent four-day Canadian railroad strike, which is expected to take weeks to recover.
Supply Chain decision-makers can employ several strategies to mitigate the risk of late deliveries, including but not limited to:
- Coordinate with subcontractors and suppliers to expedite shipments so they arrive before October. Organizations such as Walmart and Target have already begun rushing goods into the U.S. to avoid delays.
- Increase inventories for critical materials and spares.
- Design alternative route scenarios with project suppliers and contractors. West Coast ports are already seeing higher traffic due to uncertainty over the strike.
- Consider air freight as an option for the most critical material, where appropriate.
- Explore nearshore manufacturers for materials currently being sourced. While none of these options will be without additional time and financial costs, it is important to discuss all options with your project stakeholders if you have critical equipment or material that may be impacted in Q4 2024. Identifying and communicating supply chain requirements and potential disruptions is critical to developing effective contingency plans.
While none of these options will be without additional time and financial costs, it is important to discuss all options with your project stakeholders if you have critical equipment or material that may be impacted in Q4 2024. Identifying and communicating supply chain requirements and potential disruptions is critical to developing effective contingency plans.
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