As the September 30 deadline for the master contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) approaches, concerns are mounting over a potential strike commencing on October 1. This agreement impacts 45,000 dockworkers across 36 key ports from Maine to Texas, making the stakes incredibly high.
Immediate Actions Recommended
To mitigate potential disruptions, it is highly recommended to take immediate steps to move cargo out of East and Gulf Coast ports:
1. Avoid Detention or Demurrage Charges
Detention and demurrage charges can quickly accumulate, especially if cargo is left in port during a strike. These charges are incurred when cargo remains in the terminal beyond the allotted free time. To avoid these costs:
- Proactive Planning: Ensure that all cargo is moved out of the ports before September 30. This may involve coordinating with logistics providers to expedite shipments.
- Alternative Routes: Consider rerouting cargo to ports not affected by the strike or using alternative transportation methods such as rail or truck.
- Pre-emptive Actions: If you anticipate any delays, communicate with port authorities and carriers to understand their policies and potential waivers for charges during the strike period.
2. Document Access Issues
In the event that you are unable to access your cargo due to factors beyond your control, such as appointment unavailability:
- Detailed Records: Keep a comprehensive log of all attempts to access the cargo, including dates, times, and the reasons for denial of access.
- Communication: Maintain open lines of communication with port authorities and carriers. Document all correspondences and responses.
- Legal Preparedness: This documentation can be crucial if you need to dispute charges or seek compensation later. It demonstrates due diligence and attempts to mitigate the situation.
3. Utilize Extended Terminal Hours
Several terminals have announced extended hours to help facilitate the removal or return of cargo. To make the most of these extended hours:
- Scheduling: Plan your logistics operations to take advantage of these extended hours. This may involve adjusting work shifts or hiring additional staff to handle the increased workload.
- Coordination: Work closely with your logistics providers to ensure they are aware of and can accommodate the extended hours.
- Efficiency: Streamline your processes to maximize the use of the additional time. This might include pre-arranging necessary documentation and ensuring all equipment is ready for extended operations.
4. Customs Clearance of Imported Cargo
NUCO Logistics typically arranges a pre-entry filing five days prior to a vessel’s arrival at the destination. According to the Code of Federal Regulations (CFR), Importers of Record and Customs Brokers have 15 days to file entries from the arrival of the vessel at the port of discharge. Given the potential impact of the ILA strike:
- Strategic Timing: Consider delaying the filing of entries until there is more clarity on the strike situation. This can prevent complications if the cargo is stuck in port.
- Pre-Entry Preparation: Ensure all necessary documentation is prepared in advance so that filings can be completed promptly once the situation is clearer.
- Communication with Customs: Stay in close contact with customs authorities to understand any temporary measures or extensions that may be put in place due to the strike
Political Pressure and Advocacy
There has been significant pressure for an agreement to be reached. House Republicans, led by Transportation and Infrastructure Committee Chairman Sam Graves (R-MO) and Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster (R-FL), sent a letter to the White House on September 20. They urged the administration to use its authority to prevent a work stoppage on October 1, warning of “dire impacts to our supply chains, our economy, and the American consumer.” The letter was signed by 69 House members.
Earlier last week, over 175 trade organizations signed a letter to President Biden. This letter urged the administration to facilitate continued master contract negotiations between the USMX and ILA. If a new contract is not reached by the end of this month, the ILA leadership is prepared to strike container terminals from Maine to Texas.
Terminal Advisories and Industry Responses
Container terminal operations along the East and Gulf Coasts, such as APM Terminals in Elizabeth, New Jersey, and the Georgia Ports Authority in Savannah, have started issuing advisories on what to expect as the potential strike date nears. ACD has signed two letters to the Biden Administration, endorsed by over 150 shipper organizations, urging the White House to pressure both sides to commence negotiations and highlighting the severe consequences of a strike. The USMX published a press release supporting the second letter.
Current Situation and Expectations
Despite widespread efforts to prevent a strike, the following points highlight the current situation:
- No Formal Meetings Scheduled: There are still no formal meetings scheduled between the ILA and USMX.
- Biden Administration’s Stance: In the event of a strike, the Biden Administration has indicated it would not invoke powers under the Taft-Hartley Act to require the union to return to work. Instead, it would encourage both sides to negotiate while a strike is underway.
- Labor Department’s Efforts: The U.S. Department of Labor has been unable to make any progress with ILA leadership, despite attempting to offer alternatives in negotiations.
- Ocean Carriers’ Surcharges: Multiple ocean carriers have begun assessing surcharges in anticipation of labor disruptions.
As the deadline approaches, we advise our esteemed clients to remain informed. Please be assured that the NUCO teamis diligently monitoring the situation to keep our clients updated on any new developments and to collaborate closely with them to minimize additional costs until the strike is resolved. For further information, please contact NUCO Logistics.