That dockworkers' strike (albeit brief) in October? Merely a shot across the bow. Sure, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) bought some time when 45,000 dockworkers at East Coast and Gulf Coast ports ended a three-day walkout on October 3. Both sides agreed to wage increases, more pension contributions, and other benefits while extending the Master Contract until January 15, 2025. But they kicked the can down the road on the hottest sticking point: port automation.

Port operators — and supply chain professionals — want automation; the dockworkers want no part of it. And on that point, ILA boss Harold J. Daggett, a longshoreman for more than 60 years, has vowed that the rank-and-file union members will not budge. “If we have to be out here a month or two months, this world will collapse,” he said in early October.

There’s no reason to believe his outlook has changed. Most shippers agree, expressing a 60-70% likelihood that a January strike will happen.

The world can afford to wait and see what happens next, but importers and exporters cannot. If you’re an international shipper or BCO, pull your head out of the sand. Hope is not a strategy. You need to plan now for how you will keep shipments and products moving in the event of a prolonged strike that, in all likelihood, is coming. 3rdwave, an expert in shipment planning and execution, can help with that.

With all eyes on January 15, we’re devoting this newsletter to the looming strike.

Have Political Implications Delayed Negotiations?

Over a month has passed since the first walkout ended, but neither side has rushed back to the bargaining table. And nary a word has been heard from either side, except for a joint statement that negotiations will resume in November. Could it be the two parties were waiting until after the presidential election?

In October, President Biden declined to invoke the Taft-Hartley Act, which mandates an 80-day cooling-off period. Biden, now a lame duck who is decidedly pro-union, could still invoke Taft-Hartley as one of his last official acts before leaving office, but that is probably unlikely.

President-elect Donald Trump, who will take office five days after the January 15 strike deadline, might be more likely to invoke Taft-Hartley but probably won’t, given his stance on increasing manufacturing in the U.S.

Why Automation is the Sticking Point

Automation stands at the heart of the dispute. The ILA argues that automation threatens jobs, advocating for a complete ban on automated systems, including gates, cranes, and container-moving trucks. On the other hand, carriers and port operators see automation as a pathway to long-term efficiency and competitiveness, mirroring advancements seen at international ports in Europe and Asia​.

However, a U.S. Government Accountability Office report even questions the assumption that automation improves efficiency uniformly, citing instances where automated operations were slower than manual processes. However, there’s little consensus, as automation outcomes vary widely based on specific port environments and operational needs​.

While automation is a primary focus, the ILA and USMX have a number of other key issues to resolve as well. According to an MSN article, the two sides must come to an agreement regarding jurisdiction protections, demands for improved health care benefits, and the full share of container royalties, which are payments made to dockworkers to compensate for the long-term loss of jobs due to the use of containerized shipping.

As Daggett said in October, “We want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”

Economic Ripple Effects If a Strike Resumes

A January strike could and surely will lead to severe economic consequences. Back in October, potential costs were estimated at $3.5 billion to $5.5 billion per day. Key industries, including agriculture and manufacturing, would face disruptions, leading to shortages and delays that could impact consumers nationwide.

Shippers Brace for Potential Impact

Some retailers, shippers, and logistics providers are preparing for strike-related disruptions, with companies already rerouting shipments to avoid East and Gulf Coast ports.

Per Reuters, Newell Brands CEO Chris Peterson said the company switched a “couple of hundred” critical containers to other ports. "Anything we expect that we need in the back half of January, we're effectively diverting to the West Coast," he said.

Peterson is among those shippers who have expressed a 60-70% likelihood that a January strike will happen, and he’s taking proactive steps to get ahead of the sitation.

The Clock is Ticking … Are You Ready?

The stakes remain high as the ILA and USMX return to the bargaining table. While automation may offer operational improvements, finding a balanced solution addressing job security and port efficiency will be crucial. With the January 15 deadline approaching, the possibility of a prolonged strike looms, potentially shaping the future of U.S. port operations and global supply chains.

If you are an importer or exporter, now is the time to prepare for a strike. Do you have robust technology (e.g., a global TMS and trade compliance software) that will provide the product-level visibility needed to adapt your supply chain during a dockworkers' strike?

3rdwave offers a single platform that has you covered:

• Automated Customs Management from origin to destination at the click of a button that provides visibility, management of all required documents, and communication with all stakeholders.
• Trade Compliance is the first and only platform designed to manage both operations and trade compliance, creating controlled, compliant processes.
• Shipment Execution provides shippers the ability to monitor shipments from origin to destination with integrated air and ocean visibility to gain real-time updates against your schedule.
• Port Management gives shippers a control tower view of the ongoing activities at the port: inbound, at the port, and outbound.

Check out our website and contact us to learn how to successfully maneuver through the highly disruptive global market.

‍