By Nick Lung    Photo： CANVA

In a year marked by numerous trade uncertainties, the possibility of a strike by the International Longshoremen's Association, the largest maritime workers' union in North America, is starting to become a concern for logistics policymakers and consultants.

Red Sea diversions and drought restrictions in the Panama Canal have affected ocean rate negotiations, while looming deadlines for labor negotiations at East Coast and Gulf Coast ports have more shippers nervous.

Freight containers that were once bound for the East Coast are now starting to return to the West Coast to mitigate service disruptions, a reversal of what happened in 2022 and 2023 when East Coast ports saw huge increases in cargo volume due to the impact of larger ships at ports up and down the West Coast. Crowding and labor conflicts.

U.S. importers will meet with ocean carriers this week to begin contract negotiations. Between March and April, one-year contracts are signed between U.S. importers and ocean carriers to obtain the best ocean shipping prices.

A strike by U.S. East Coast port workers could have a serious impact on shipping companies, as East Coast ports are one of the main gateways for U.S. imports and exports of goods. This strike can cause the following problems:

Cargo detentions and delays: Strikes can lead to cargo delays and delays at ports, as loading and unloading of ships and handling of cargo cannot take place. This could have a knock-on effect on the supply chain, causing delays in goods delivery and production disruptions.

Increased costs: Delays and detentions can lead to increased waiting times for ships, which increases shipping costs. In addition, strikes may result in shipping companies needing to pay additional compensation or find alternative solutions to handle affected cargo, further increasing costs.

Reputation damage: Cargo delays and supply chain disruptions can damage a shipping company’s reputation. If customers are disappointed or affected, they may turn to other suppliers, which may have an impact on the long-term stability of the shipping company's business.

Legal risks: Strikes may trigger legal action or other legal risks, such as litigation over labor rights issues or facing fines.

Government intervention: The government may step in to mediate the strike, which could lead to more uncertainty and management challenges for shipping companies.

For shipping companies, solutions should be found to minimize the impact of strikes on business, which may include negotiating with unions to resolve labor disputes, optimizing supply chains to reduce dependence, and making risk management plans in advance, etc.
 

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