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International Longshoremen’s Association (ILA) Strikes Shutting Down East Coast Ports

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Around midnight on September 30^th the International Longshoremen’s Association (ILA) went on strike. With this strike, ports from Maine to Texas have ceased operations. This affects 36 ports along the United States east coast and marks the first ILA strike in close to 50 years.

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Statement from the ILA:

International Longshoremen’s Association (ILA) Shuts Down All Ports On Atlantic and Gulf Coast On Oct 1st, As Strike Begins Against United States Maritime Alliance (USMX)

NORTH BERGEN, NJ. (October 1, 2024) The International Longshoremen’s Association shut down all ports from Maine to Texas at 12:01am on Tuesday, October 1, 2024, as tens of thousands of ILA rank-and-file members began setting up picket lines at waterfront facilities up and down the Atlantic and Gulf Coasts.

The ILA rejected United States Maritime Alliance (USMX) final proposal made on Monday, setting the stage for the first ILA coast wide strike in almost 50 years. The USMX last offer fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.

“USMX brought on this strike when they decided to hold firm to foreign owned Ocean Carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth,” said President Harold Daggett, the leader of the 85,000-member ILA union. “We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve.”

Even the leaders in Washington who encouraged the ILA and USMX to keep negotiations going up until the September 30th deadline, concluded on Monday that USMX and the greedy foreign companies they represent are only interested in protecting their fat revenues and not taking care of hard-working ILA longshore workers.

The ILA said USMX’s supposed wage increase offer fell far short of the demands of ILA rank-and-file members for them to ratify a new contract.

“USMX owns this strike now,” said ILA President Daggett. “They now must meet our demands for this strike to end.”

Contact: Jim McNamara, ILA. jmcnamara@ilaunion.org

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Current reports are stating that the Biden administration does not plan to invoke the Taft-Harley Act. The USMX did propose a offer yesterday that would include a 50% wage increase along with other benefits but was rejected by the ILA.

The USMX is made up of 13 members and three separate sets of representation. The ports, shipping associations and ocean carriers make up board.

We here at BOC will continue to monitor the ongoing negotiations and will provide updates as they become available. If you have any questions in regards to how your business is being affected please contact your local BOC representative. 

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New Alliances in 2025 of Transpacific Trade

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Hapag-Lloyd and Maersk have signed a new long-term operational collaboration called “Gemini Cooperation,” which will begin in February 2025.

ONE, HMM, and YML are expanding their global coverage through the Premier Alliance, adding over 80 direct port calls. This cooperation will also start in February 2025.

ZIM has entered into a long-term operational partnership with Mediterranean Shipping Company (MSC) for services between Asia and the U.S. East Coast, as well as Asia and the U.S. Gulf. These new services will launch in February 2025.

The Ocean Alliance will remain unchanged until 2032.

Below is the service map for Premier, Gemini, and ZIM & MSC for your reference.

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ZIM & MSC Cooperation

Premier Alliance

Gemini Cooperation

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Canadian Government Intervenes
 in Rail Stoppage, Proposed Strike in India
& Ocean Shipping Delays Worsen in 2024

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Canadian Government Steps In

OTTAWA, Aug 22 (Reuters) – The Canadian government moved quickly on Thursday to end an unprecedented rail stoppage the same day it began, announcing it would send the matter to binding arbitration.

Canada’s top two railroads had locked out more than 9,000 unionized workers, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage.

Labour Minister Steven MacKinnon told reporters he was acting “in order to ensure that the activities of both of these rail companies immediately resume”.

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Proposed Strike in India

Please find below an update on the proposed strike by port workers at major ports in India, scheduled to begin on August 28th, 2024. The affected ports include Deendayal (Kandla), Mumbai, Mormugao, New Mangalore, Cochin, Chennai, Ennore (Kamarajar), Tuticorin (V.O. Chidambaranar), Visakhapatnam, Paradip, Kolkata (including Haldia), and Jawaharlal Nehru Port (JNPT). Dry bulk vessel operations and cargo movement at adjacent berths will be the first to be impacted.

Please note that private terminals, including those operated by JSW and Adani at Kattupalli, Gangavaram, Ennore, Visakhapatnam, Dhamra, Paradip, Goa, and New Mangalore, will not be affected and will continue to operate as usual.

Additionally, on August 26th, a meeting will be held at Nhava Sheva. Following this meeting, the Nhava Sheva Terminal will decide whether to support the strike.

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Delays in Ocean Shipping Worse in 2024 than 2023
(excerpted from container-news.com)

In May 2024, global schedule reliability saw a month-over-month increase of 3.8 percentage points, reaching 55.8%. This marks the highest reliability figure for 2024, surpassing the previous peak of 54.6% by 1.2 percentage points. However, compared to May 2023, schedule reliability was down by 11 percentage points (emphasis added).

Despite this improvement, the average delay for vessels arriving late worsened, rising by 0.34 days month-over-month to 5.10 days. This figure now approaches levels seen during the pandemic peak rather than the lower delays seen before the pandemic. Year-over-year, the delay in May 2024 was 0.73 days longer.

On a year-to-year level, none of the 13 carriers recorded an increase in schedule reliability, with eight carriers recording double-digit year-to-year declines, according to the analysis.

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Massive looming Canadian rail shutdown could have economic ripple effects throughout America

https:/Avww.cnn.com/2024/08/19/business/canada-rail-strike?cid=ios_app 

Canada’s freight rail network could come to a grinding halt this week, inflicting a huge economic toll after the country’s two largest railroad operators on Sunday issued lockout notices to the Teamsters union that represents nearly 10,000 workers.

Failing last-minute deals, both Canadian National Railway and Canadian Pacific Kansas City plan to lock out workers from the early hours of Thursday.

Tt marks the first time that the country has faced a simultaneous labor stoppage at the railroad firms as they normally negotiate their labor agreements in alternate years.

The stoppages could cripple the shipment of food grains, beans, potash, coal and timber which form a large part of Canada’s exports, while also impacting shipments ranging from petroleum products to chemicals and cars.

In addition to billions of dollars of economic damage, the stoppages could disrupt rail trade across the North American continent.

“Unless there is an immediate and definite resolution to the labor conflict, CN will have no choice but to continue the phased and progressive shutdown of its network which would culminate in a lockout,” CN said in a statement.

“Despite negotiations over the weekend, no meaningful progress has occurred, and the parties remain very far apart,” it said.

The Teamsters union argues CN wants to implement a forced relocation provision which would see workers ordered to move across Canada for months at a time to fill labor shortages.

CN says it has made four offers this year on wages, rest, and labor availability while remaining fully compliant with government-mandated rules overseeing duty and rest periods.

The dispute with CPKC centers on safety issues with the union arguing the firm wants “to gut the collective agreement of all safety-critical fatigue provisions,” meaning crews will be forced to stay awake longer, boosting the risk of accidents.

CPKC says its offer maintains the status quo for all work rules, “fully complies with new regulatory requirements for rest and does not in any way compromise safety.”

The Teamsters, which represents yard workers, rail traffic controllers, locomotive engineers and conductors, earlier on Sunday issued a 72-hour strike notice to CPKC ahead of the company’s lockout notice.

It also said in a separate statement to members that the lockout notice issued by CN should be treated “as if we were on strike.”

“We’re serving strike notice to defend the rights and safety of our members,” Paul Boucher, president of the Teamsters Canada Rail Conference said in the statement.

Both CN and CPKC have said their networks outside of Canada will continue to operate but the stoppages could have ripple effects. The two Canadian rail operators” networks connect with several key U.S. rail and shipping hubs such as Chicago, New Orleans, Minneapolis and Memphis. CPKC”s network also extends further south connecting with ports on both the east and west coasts of Mexico.

The federal Liberal government has so far dismissed pleas from business groups to intervene, saying it wants the companies and the unions to sort out their differences via negotiations

‘Rail is our lifeline’: Businesses brace for possible CN/CPKC shutdown amid lockout-strike threats.

https://vww.cbc.ca/amp/1. 7298414

To business executive Daniel Peretz, the possibility of a railway strike or lockout is more than a headline.

“The rail service is our lifeline,” he said. “Without the rail service, we don’t operate the business, we don’t have 13 employees working here, we’re unable to service a very important industry.”

Peretz is president and CEO of NexGen Polymers, a plastics material transloading facility operating out of a rail-served warehouse and office space just east of downtown London, Ont.

Outside the building’s brick walls, there’s a series of railway sidings that together hold about 40 railcars. Each graffiti-covered rail car holds plastic pellets delivered to the site by petroleum companies from across North America and overseas.

Twice a week, a Canadian Pacific Kansas City (CPKC) crew comes to pull away about 10 empties from NexGen and replace them with loaded railcars.

The plastic pellets — each about the size of an unpopped popcorn kernel — come delivered to Peretz’s site in various colours and grades.

The pellets are vacuumed out of the railcars and into storage tanks for testing, mixing and eventual delivery by truck for customers. The manufacturers Peretz sells to turn the pellets into products and packaging that Canadians see on almost every store shelf.

“Plastic water bottles, the overwrap for toilet paper — really every aspect of every component of what we purchase today is made from plastic, from industrial products, to food, to industrial to medical,” he said.

Dispute creates chain reaction

A labour dispute at both Canadian National and CPKC threatens to derail not only Peretz’s business, but the scores of manufacturers he supplies in a complex, just-in-time supply chain. The Canadian Federation of Independent Business has said the lockout could be devastating for small businesses that depend on rail service.

Railways carry more than $1 billion worth of goods each day, according to the Railway Association of Canada, and over half of the country’s exports travel by rail.

Contract talks between the Teamsters union and the companies usually take place a year apart, but in 2022, after the federal government introduced new rules, CN requested a year-long extension to its existing deal rather than negotiate a new one.

This meant both companies’ labour agreements expired at the end 0£ 2023 and talks have been ongoing since.

The companies and the union have accused each other of bad faith bargaining. The teamsters say CN Rail and CPKC are seeking concessions that could endanger worker safety, but both the operators deny that.

On Monday, the union representing thousands of workers at CPKC served a 72-hour strike notice to the railway. CN Rail issued a notice that it intends to lock out workers at that same time unless an agreement or binding arbitration is reached.

As the dispute lurches on, both companies have already started to scale back shipments in preparation for a possible strike or lockout. It’s a high-stakes standoff that could disrupt the two largest links in a crucial, cross- country supply chain impacting multiple industries and businesses.

Peretz has asked CPKC for specifics about if and when his deliveries might be affected, but said he hasn’t been able to get clear answers.

He said any prolonged disruption in rail service would cause widespread challenges in the supply chain. “Our customers would feel it based on the price per pound that they pay for the material,” he said.

In the volumes his business requires, Peretz has no other way to get plastic pellets to his warehouse. It’s a gap, he said, that can’t be filled by trucks.

“A rail car is 200,000 pounds net weight of material … ‘d have to do four trucks to get that same volume,” he said. “You’re adding tremendous cost, tremendous CO2 emissions.”

Peretz isn’t the only business owner who hopes the railways and unions can reach a deal in time to keep the trains rolling.

Crosby Devitt, a grain farmer and CEO of Grain Farmers of Ontario in Kincardine, Ont., said about $43 million worth of grain is shipped in Canada by rail every day.

“Even in our industry, we sometimes underestimate the importance of rail,” he said. “Whenever there’s a threat of a disruption, it’s brought to the forefront.”

Plea to ‘not let this get out of hand’

The timing of the potential shutdown is a problem for him because grain and other crops have to be harvested at a specific time.

If shipping isn’t possible, they could run out of storage capacity very quickly.

On Thursday, federal Labour Minister Steven MacKinnon rejected a request from CN to impose binding arbitration, saying he wants the company to bargain in good faith.

Devitt said the federal government shouldn’t hesitate to step in if the railways and unions can’t reach a deal.

“We know the parties on both sides are engaged to find a solution, but we implore the federal government to not let this get out of hand because no one wins when we have a disruption to the economy on this type of scale.”

Key Market Updates on Canada Rail Strikes, US Dockworkers’ Strike and Temporary

Closure of Ningbo Port Due to Container Explosion

Canada Rail Strike

https://globalnews.ca/news/10691169/rail-strike-canada-labour-board-ruling/

Rail strike may begin this month after labor board says work non-essential

As the negotiating clock ticks down, the country’s two main railways are set for a nationwide strike or lockout in less than two weeks after a ruling that their work does not amount to an essential service

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. warned Friday that lockouts on Aug. 22 are imminent unless new contracts with their employees can be secured.

The warnings came hours after the Canada Industrial Relations Board ruled that a work stoppage would pose no “serious danger” to public health or safety, opening the gate to a full-fledged strike or lockout. If either occurs, employees at CN or CPKC would not be compelled to continue hauling goods, including key commodities such as chlorine for water and propane for care centres.

Some 9,300 conductors, engineers and yard workers at CN and CPKC have been bargaining on and off over a pair of new collective agreements for months.

The labour tribunal ordered a 13-day cooling-off period as part of the dual decisions Friday. If new deals cannot be reached in that window, countrywide lockouts or strikes by employees represented by the Teamsters Canada Rail Conference (TCRC) could kick off as early as Aug. 22.

Late Friday afternoon, Canadian Pacific said it will lock out 3,300 employees one minute after midnight on Aug. 22 unless a deal is secured.

“If no resolution is reached during bargaining through the extended cooling-off period, and the TCRC continues to refuse binding interest arbitration,

CPKC will have no choice but to take this action,” the company said in a release, citing supply chain stability. CN called on the federal government to impose binding arbitration, saying it has “lost faith” in the negotiating process.

A phased shutdown of its network would also culminate in an Aug. 22 lockout of 6,000 workers, it said. The union said its focus remains good-faith bargaining. “Whether or not this is possible is entirely up to CN and CPKC,” said spokesman Christopher Monette. Shippers and producers say the potential stoppage at CN or CPKC or both simultaneously would halt freight traffic, clog ports and disrupt industries.

In May, then-labour minister Seamus O’Regan asked the industrial relations board to review whether a work stoppage would jeopardize Canadians’ health and safety after union members voted overwhelmingly to approve a strike mandate. Friday’s ruling effectively “places the parties back in the position they were in” before the ministerial referral, the board wrote.

“There is no doubt that a work stoppage at CN would result in inconvenience, economic hardship and, possibly, as some groups and organizations have suggested, harm to Canada’s global reputation as a reliable trading partner,” the tribunal said in a unanimous decision.

However, the question of what constitutes an essential service under the Canada Labour Code is “very narrow,”
it continued.

“The board is satisfied that, at this time, a strike or lockout at CN would not pose an immediate and serious danger to the safety or health of the public. The tribunal came to the same conclusion in a separate ruling concerning Canadian Pacific. Sticking points at the bargaining table boil down to crew scheduling, fatigue management and safety, the Teamsters said. The union has rejected binding arbitration with both companies. Each side says the other has made excessive demands that led to a weeks-long bargaining impasse.

Canadian railways haul about $380 billion worth of goods and more than half of the country’s total exports each year, according to the Railway Association of Canada.

Anxiety over a strike by thousands of employees has already cost the two railways some business after some customers started to reroute cargo following the union’s strike mandate authorization on May 1. Federal Labour Minister Steven MacKinnon, who replaced O’Regan after the latter resigned from cabinet three weeks ago, said the two sides need to hash out a deal themselves rather than rely on government intervention, such as back-to- work legislation.

“I call upon the parties to stay at the bargaining table and continue holding productive and substantive
discussions that meet the needs of this moment. A negotiated agreement is the best way forward,” he said in a statement Friday.

The stance differed from that adopted by industry the players most frustrated by Friday’s ruling in a message to the prime minister.

“We are writing to urge you to immediately intervene and do everything necessary to avert a disruption,” stated the joint letter from 70-plus industry groups and 40 chambers of commerce.

The organizations warned that a prolonged stoppage would strangle the goods pipeline, drive up prices and aggravate affordability problems for businesses and individuals, on top of the risk of furloughs at companies
forced to suspend operations. Commuters could feel the effects of a work stoppage as well. Should one occur
involving the 80 CPKC rail traffic controllers negotiating for a contract – distinct from CPKC’s main bargaining group passenger trains that run on Canadian Pacific-owned tracks in Vancouver, Toronto and Montreal could shut down.

Factories would also face back-ups right away, said Dennis Darby, CEO of Canadian Manufacturers & Exporters.

“You pay penalties because you’ve delayed delivery,” he said in an interview. “Canadians don’t realize how integrated our manufacturing sector is and how small the inventories are. That’s why stuff is moving all the time.”

Bob Masterson, CEO of Chemistry Industry Association of Canada, called the tribunal decision “disappointing.” “There’s no plan B,” said Masterson, whose organization represents producers of plasties and chemicals.

About 80 percent of the sector’s $100 billion in annual shipments relies on rail transport, much of it going to U.S. automakers but plenty bound for Canadian municipalities that need chlorine to disinfect drinking water, he said. “The government has asked us, What about trucks?” No. 1, what trucks? We already have a driver shortage,” he said in an interview.

One railcar amounts to three big rigs worth of commodities, he said. “And every day we move 530 railcars. So somehow, at short notice, we’re going to find 1,500 to 2,000 more trucks to carry our product, as well as everybody else trying to? That’s just not possible at all.”

ILA Dockworkers’ Update from their Leaders to their Membership

Attention ILA Members,

I want to address the recent communication from USMX and make it clear do not be fooled by this letter. We are indeed continuing to bargain in good faith to settle all local contracts, but the reality on the ground is far different from the picture they are trying to paint.

Employers like APM Mobile have been dragging their feet on resolving critical issues. One such issue is their use of Autogate in TIR Lanes, which we consider a clear violation of our Master Agreement. This isn’t just happening in one location, many other ports are facing similar challenges in getting local management to agree on terms and conditions for local supplemental agreements,

On top of that, when it comes to the Master Contract negotiations, let me be frank-we are very far apart, particularly on the economic issues. In fact, we are at an impasse. The propaganda coming from USMX is just that propaganda, likely the work of a PR firm trying to spin the situation in their favor

Remember, unless you hear it directly from us, it’s not the truth. Stay strong,

stay united, and know that we are fighting every day for the fair contract that

you deserve.

In Solidarity,

Harold and Dennis Daggett

Over 1 billion tons of cargo pass through the port each year, worth upward of $1 trillion, according to annual estimates. The port also serves the Yangtze River Delta including China’s major eastern hub of Shanghai.

The YM Mobility is 1,000 feet long and 130 feet wide, with a capacity of 81,000 deadweight tons. Shipping records suggest it carries goods between China and the Middle East. GPS data captured by the Marine Traffic website showed a number of rescue tugs positioned near the damaged container ship in the hours after the explosion.

The YM Mobility berthed in Shanghai on Wednesday before arriving in Ningbo on August 8, according to ship- tracking records. It was due to make two more port calls along China’s east coast before departing for the South China Sea and the Indian Ocean.

China’s Maritime Safety Administration did not immediately respond to a written request for comment.

YM Mobility Vessel Rotation

Overall Market Update – Including Details on the Increasing Threat of October 1 ILA Labor Strike

Asia to USA Cargo volume is still strong, and we believe it will maintain a robust pace until CNY (January 29, 2024) because of the following reasons:

1. Consumer confidence is becoming stronger

2. A rate cut by the Fed is likely in September

3. Stock Market repeatedly hitting all-time highs

4. With the potential for a second term for Donald Trump, there is the possibility of higher tariffs beginning in 2025. Importers are gearing up to bring in product in advance of these potential increases.

5. ILA President Harold Daggett says the threat of the October 1st Strike at US Atlantic and Gulf Ports is growing more likely. Cargo will be pushed to be front-loaded as much as possible to compensate for potential delays in cargo arrival. Please see the article below from the ILA’s website.

We note that additional capacity has been added to the USWC, which is helping relieve some of the cargo pressure, but the overwhelming cargo surge is still overpowering the market. Please reach out to your BOC representative to help facilitate the movement of your cargo. Thank you for all your support.

https://ilaunion.org/2024/07/ila-president-harold-daggett-says-threat-of-october-1st-strike-at-atlantic-and- gulf-coast-ports-growing-more-likely/)

ILA President Harold Daggett Says Threat of October 1st Strike At Atlantic and Gulf Coast Ports Growing More Likely
JULY 12, 2024

NORTH BERGEN, NJ – (July 12, 2024) The leader of the International Longshoremen’s Association says the threat of a strike at all Atlantic and Gulf Coast Ports is becoming more likely as time is growing short before the current contract expires in 80 days, on September 30, 2024. Harold J. Daggett, ILA President and the union’s Chief Negotiator, said that the employers represented by United States Maritime Alliance (USMX) are running out of time to negotiate a new Master Contract agreement and avoid and coastwide strike on October 1, 2024.

“Only 80 days remain before the end of our current contract and we are waiting on USMX,” said ILA President Daggett. “The actions of violating our current Master Contract by some of their members caused us to cancel scheduled negotiations with USMX in early June.”

The ILA canceled Master Contract talks with USMX after discovering that APM Terminals and Maersk Line were utilizing an Auto Gate system, which autonomously processes trucks without ILA labor. This system, initially identified at the Port of Mobile, Alabama, is reportedly being used in other ports as well.

The ILA said on June 10, 2024, that it would not meet with USMX until the Auto Gate issue is resolved. Additionally, the union is still waiting on results from an audit for jobs created out of new technology, a report they have been anticipating for almost two contract periods. The ILA has observed an increasing number of IT personnel on marine terminals, with concerns that APM and Maersk’s IT departments in Charlotte, North Carolina, are encroaching on their jurisdiction.

President Daggett said the ILA rank-and-file members are 100 percent behind him and are willing the “hit the streets” on October 1, 2024, if the union’s contract demands are not met.

“We will not entertain any discussions about extending the current contract, nor are we interested in any help from outside agencies to interfere in our negotiations with USMX,” said President Daggett. “This includes the Biden Administration and the Department of Labor.”

Whenever USMX resumes negotiations, the ILA said it expects shipping companies to recognize the contributions ILA longshore workers made during the pandemic, when ports remained open, allowing companies to record billion-dollar profits.

About the International Longshoremen’s Association:

The International Longshoremen’s Association (ILA) is the largest union of maritime workers in North America, representing 85,000 longshore workers along the East Coast, Gulf Coast, Puerto Rico, Great Lakes, and major U.S. rivers. Its membership includes longshore workers in Eastern Canada and the Bahamas. The ILA is dedicated to ensuring fair labor practices and protecting the rights and jobs of its members.

Breaking News: ILA Halts Negotiations with USMX Amid Automation Disputes

Via: https://ilaunion.org/2024/06/ila-halts-negotiations-with-usmx-amid-automation-disputes/

Labor negotiations have taken a turn for the worse. Please see the article below from the ILA website. The increased risk of a strike will likely accelerate US companies to bring in and ship out more goods as soon as possible because of the greater possibility of coming US port slowdowns and shutdowns. Please see your BOC representative for guidance and support.

JUNE 10, 2024

International Longshoremen’s Association (ILA) Halts Negotiations with United States Maritime Alliance (USMX) Amid Automation Disputes

North Bergen, NJ – (June 10, 2024) The International Longshoremen’s Association (ILA) today announced the suspension of talks with the United States Maritime Alliance (USMX) scheduled for Tuesday, June 11, 2024. This decision arises amidst ongoing negotiations of local agreements under the coast-wide Master Contract, set to expire on September 30, 2024.

The ILA canceled Master Contract talks with USMX after discovering that APM Terminals and Maersk Line are utilizing an Auto Gate system, which autonomously processes trucks without ILA labor. This system, initially identified at the Port of Mobile, Alabama, is reportedly being used in other ports as well. A spokesperson for the ILA stated, “Here we go again! This is another example of USMX members unilaterally circumventing our coast-wide Master Contract. This is a clear violation of our agreement with USMX, and we will not tolerate it any longer.”

“There’s no point trying to negotiate a new agreement with USMX when one of its major companies continues to violate our current agreement with the sole aim of eliminating ILA jobs through automation,” said International President Harold J. Daggett, who serves as chief negotiator for the union.

The ILA will not meet with USMX until the Auto Gate issue is resolved. Additionally, the union is still waiting on results from an audit for the jobs created out of new technology, a report they have been anticipating for almost two contract periods. The ILA has observed an increasing number of IT personnel on marine terminals, with concerns that APM and Maersk’s IT departments in Charlotte, North Carolina, are encroaching on their jurisdiction.

“We are not taking this lightly,” the ILA cautioned.

The ILA is monitoring and keenly aware of APM Terminals and Maersk Line’s repeated attempts to circumvent the ILA-USMX Master Contract and cut ILA jobs through the introduction of automation and semi-automation equipment.

“Most of the problems the ILA is facing on the East and Gulf Coast all stem from APM Terminals and Maersk Line,” the ILA added. “Maersk Line, the second largest ocean carrier in the world, has a track record of pushing automation. They started semi-automation in the Port of Hampton Roads, and have full automation at Pier 400 in Los Angeles, California. The ILA lost tens of thousands of jobs in the 1970s due to containerization, and APM and Maersk seem to be leading the charge to eliminate good, family-sustaining jobs right here in the U.S.”

The ILA has long expressed deep concern over the impact of automation on jobs, highlighting APM Terminals and Maersk Line’s abuse of the ILA Master Contract, which have led to job losses in various ports.

ILA President Daggett made it clear that the union will take a firm stance against any technology that threatens ILA jobs. He spoke extensively at the union’s quadrennial convention last summer, about Maersk Line’s history of pushing automation down the throats of workers around the world.

“Who the hell is a foreign company like Maersk, to come on to American soil and build fully automated terminals,” the ILA leader asked in a fiery speech to hundreds of ILA delegates at that July 2023 Convention. “This foreign company Maersk tries to shove fully automated terminals down our throats and for what reason? To eliminate good paying American jobs, ILA jobs.”

The ILA leader expressed criticism of President Joe Biden and lawmakers for turning a blind eye to automation and its devastating effect on American workers.

“How can this Administration allow a foreign company like Maersk, and other foreign shipping companies, to get away with this?” President Daggett asked in his convention remarks, as he warned Maersk and other foreign companies of the consequences of their plans to automate. “Mark my words, there is going to be a

n explosion, and the ILA and dockers around the world are going to light the fuse.”

His son, Dennis A. Daggett, who serves as the ILA’s Executive Vice President, echoed these sentiments in his own convention remarks, as he stated that the relationship with USMX is not as it appears.

“We want ironclad language and the actual intent of that language in writing,” he told ILA convention delegates last July. “Years after we sign a contract, everyone seems to get amnesia.”

Today as the ILA announced cancelation of talks with management, ILA Executive Vice President Daggett said: “I guess they (USMX) just thought our speeches at the convention were for show. Well, I hope they realize by now that every word spoken was real and sincere.”

The ILA is now putting action behind those words as it cancels talks with USMX.

The ILA believes there are many issues that need to be resolved in their current agreement before they resume negotiations. With less than four months until the contract’s expiration, the ILA has very little faith that these issues will be addressed in time. “Historically, management has been known to drag their feet or kick the can down the road, but I think this time it caught up with them.”

The ILA continues to call on the Administration and President Biden to recognize the threat posed by foreign-owned companies attempting to undermine American jobs. “We won’t stand for it, and neither should they,” the spokesperson concluded.

About the International Longshoremen’s Association

The International Longshoremen’s Association (ILA) is the largest union of maritime workers in North America, representing 85,000 longshore workers along the East Coast, Gulf Coast, Puerto Rico, Great Lakes, and major U.S. rivers. Its membership includes longshore workers in Eastern Canada and the Bahamas. The ILA is dedicated to ensuring fair labor practices and protecting the rights and jobs of its members.

A COVID Shipping Environment Without COVID

There is a massive escalation in the pricing of spot rates at a pace like the one we experienced during the COVID-19 pandemic. Every two weeks for the past two months, we have seen successful rate increases in the spot market as high as $1,000 or more each time, depending on port pairs. We expect the trend to continue for at least the next 30 days, with GRIs and PSSs on June 1^st and June 15^th forecasted to exceed $2,000 of additional rate increases by the end of June.

What is causing these increases?                   

Less Supply and More Demand

Here are some supply and demand factors that demonstrate what creates this challenging environment.

Less Supply

1. The ocean carriers are cutting space and creating high demand to earn more profit by reducing the supply. Trans-Pacific capacity into the West Coast has seen a reduction versus plan of some 14%, whereas the trade into the East Coast has seen a reduction of 11%. These “blank/canceled” sailings are the number 1 factor driving increased prices. The additional capacity that was supposed to be added is not happening at the pace as promised. The exact opposite occurs with these space reduction actions, which cut supply.

• The geopolitical unrest has practically closed the Suez Canal for container vessels, taking capacity out of the system and reducing the supply.

• The lack of water in the Panama Canal and construction in the Canal has limited the number and weight of vessels transiting the Canal. This restrictive activity has been improving due to recent rain in Panama, but it is still not back to normal capacity.

• The threat of labor strikes at the Canadian Rails and Canadian Ports has caused diversions and congestion as shippers try to avoid Canadian routings whenever possible. This congestion increases the supply problem as cargo bunches at ports and rails.

• There is also a growing problem of a supply shortage of empty containers in Asia due to the slow return of empties due to the longer transit times and reduced stops to pick up empties when going around the Cape of Good Hope. A container shortage adds to the pressure and increases prices as shippers compete for empties to load their products.

More Demand

1. The “hoarding of toilet paper factor” is kicking in again in our shipping world. Buyers are seeing delays, rushing to place orders earlier, and making them larger. The calm, slow replenishing process that was going on at the beginning of the year is now a mad scramble to get as many goods in as possible as soon as possible. It is clear that shippers fear there will be a squeeze on capacity during the peak season in Q3 then they will start importing more goods now.

• Container volumes are forecasted to be up 10-20% for the first six months of 2024 vs 2023, as noted by various indexes creating more demand than expected.

• The threat of labor demonstrations/strikes at the US East Coast Ports, whose longshore union workers contracts expire in September, has pushed shippers to ship sooner to prepare for work slowdowns and disruption.

We recommend booking cargo as far in advance as possible and preparing for delays in moving cargo. We see many origins booked 2-3 weeks in advance. After talking to many experts, no one has convinced us of a firm date for things to return to “normal,” but we expect that most agree; this will continue through the end of July.

Please reach out to your BOC representative to help guide you through this crisis. Thank you for all your support.