Is an ILA Strike Imminent?

Over the course of the past year, much discussion has happened regarding the International Longshoremen’s Association (ILA) and its open contract for US east coast and gulf ports. In September when the threat of strike was looming, they made a last minute agreement that would delay the negotiations for 90 days. That date is fast approaching and no agreement has been reached. The temporary agreement expires December 29 and without a contract, the ILA has already authorized a strike.

Many retail and wholesale companies as well as business groups have been preparing for this date although there is very little they can do as outsiders. Even companies within the shipping industry like freight forwarders and brokers cannot do much to change anything.  Special interest groups have been in contact with the US president to try to get him to enact the Taft-Hartley Act which allows the President to intervene in cases in the private sector in which a strike would cause a national emergency. Under the circumstances of the recent strike in LA, the continuing recession and the recovery from hurricane Sandy, many people believe this would create a huge backup that would impact both national and international commerce for months and even years. Even a strike of a few days could have a meaningful impact on commerce. 

In the next few days, we will find out if there is an agreement reached, but diversions will need to be made before then to avoid severe backups. Shipping companies are already preparing to add charges to make up for the costs. Maersk in particular is planning to charge upwards of 800USD as a congestion surcharge. If nothing is done to avoid this strike, it could be an expensive way to make a point in contract negotiations. Hopefully both sides can come to an agreement before the 29^th.