The current ILA (International Longshoremen’s Association) contract is set to expire on September 30, 2024. The latest news reports do not paint an optimistic picture that a contract will be signed by the expiration date. Both sides are currently blaming each other for the stalemate.

The USMX (Maritime Alliance) is reporting that the ILA refuses to come to the bargaining table. The ILA on the other hand is reporting that the two sides have communicated, but that the USMX continues to lowball them on their contract offers.

The reality is that barring some last minute breakthrough or intervention by the U.S. government, a work stoppage seems inevitable. The impact of a work stoppage can be broken down into the following categories:

1.) Transit time for incoming shipments
Shipments on the water headed for the east and gulf coast ports will be delayed. Based on our experience from past longshoremen work stoppages, vessels will initially anchor outside the various ports. They may do so for a week or so. As the vessels build up at anchor, some carriers may eventually decide to divert vessels and discharge containers at other ports (ex. Cargagena, Manzanillo, Kingston, or Colon). If the work stoppage continues for even longer, carriers may decide to even discharge containers at west coast ports.

2.) Cost to shippers
A number of carriers have announced congestion/disruption surcharges to be effective on various starting dates in October for shipments to east coast and gulf coast ports. The surcharges range from $1000/40′ to $5000/40′ depending on the carrier.

If carriers do discharge containers at other ports, they may declare Force Majeure. In such cases, shippers may be forced to pay the additional cost of transporting their goods from the diversion port to their intended delivery location.

Shippers and importers can follow closely on either the USMX or ILA websites for updates.