At the stroke of midnight on October 1, an estimated 45,000 dockworkers at ports from Maine to Texas walked off the job, effectively bringing East Coast and Gulf Coast ports to a standstill. They want their fair share of the pie — and they ain’t just whistlin’ Dixie.

After two years of failed negotiations, this game of high-stakes chess between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) has hit an impasse. It’s a stalemate that leaves billions of dollars of goods stranded at sea or in ports. The first ILA strike in more than 50 years might cost the U.S. economy between $3.8 billion and $4.5 billion per day, according to an analysis by JPMorgan.

Without taking a position for one side or the other, this edition of the 3rdwave newsletter takes a closer look at the strike and how it leaves international shippers and beneficial cargo owners as pawns stuck in the middle, facing extended delays in an already challenging global supply chain.

The Key Demands: Wages and Automation

The ILA, representing tens of thousands of workers, rejected the latest offer: one that included a 50% wage increase, triple employer contributions to employee retirements, and more healthcare benefits — but sought to keep existing language regarding automation and semi-automation in the next agreement. Union boss Harold Daggett said his members are prepared to strike “for as long as it takes” to get what they want.

The USMX says its latest offer is fair and that some level of automation is crucial to the U.S. ports’ ability to remain competitive on the international stage.

Impact on Global Supply Chains

The strike has disrupted the operations of 14 major ports along the East and Gulf Coasts, including the critical hubs of New York/New Jersey, Savannah, and Houston. These ports handle more than half of the country’s imports and exports, processing millions of containers every year. An extended shutdown of this magnitude will create far-reaching ripple effects around the globe:

• Supply Chain Disruptions: The flow of goods between the U.S. and trading partners will slow, impacting industries reliant on timely deliveries. Delays in goods such as auto parts, consumer electronics, and perishable goods could disrupt production cycles in countries that depend on U.S. imports or exports to the U.S.
• Increased Shipping Costs: As companies reroute cargo to West Coast ports such as Los Angeles/Long Beach or shift to more expensive modes of transport like air freight, global shipping costs will rise. This increase may contribute to higher prices for consumers worldwide​. And while many carriers have suspended demurrage and detention charges, that relief does not extend to shipments already accumulating fees.
• Ripple Effects on Other Countries' Exports and Imports: Nations with strong trade ties to the U.S. could face reduced demand for their exports, leading to economic slowdowns. For example, agricultural exporters in Latin America and Asian electronics manufacturers may face delays or reduced orders.

Join 3rdwave at the ICPA Fall Conference

Regardless of how long it continues, the dockworkers’ strike will undoubtedly be a topic of discussion among the attendees at the 2024 ICPA Fall Conference, scheduled Oct. 20-23 in Grapevine, Texas.

This annual gathering of compliance professionals offers insights into regulatory updates and best practices for navigating the current complexities of global trade. Grant Sernick, 3rdwave’s Head of Sales & Marketing, will deliver his presentation, “Freakin’ Control or Control Freaks.”

And while you are there, be sure to stop by Booth 18 and say hello to Grant.

3rdwave Is Here to Guide You Through Turbulent Times

The East Coast and Gulf Coast dockworkers strike has the potential to disrupt the global trade market on a scale we haven’t seen since the COVID-19 pandemic. This developing situation underscores why shippers and BCOs need robust technology (a global TMS and trade compliance software) to drive adaptable supply chains.

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.

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