A week after contract negotiations broke down between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA), the largest local in the union (Local 1804-1 in North Bergen, NJ) unanimously voted for a strike. ILA represents dockworkers at East and Gulf Coast ports in the U.S. Disputes over the contract, which expires September 30, 2012, have centered on productivity and efficiency improvements. Specifically, USMX has requested concessions regarding overtime pay and elimination of jobs. ILA is aligned with other unions, both in the U.S. and overseas, that are expected to support a strike if the two sides do not come to an agreement. With time running out for additional negotiations, Deringer recommends shippers implement contingency plans.

A strike will cause delays in the U.S. and Canada, and along both coasts, as cargo is rerouted to Canadian or U.S. West Coast ports. As a result of the looming strike, carriers are quoting mini-land bridge (MLB) services at rates in excess of 50 per cent higher than in July. To alleviate supply chain delays, Deringer recommends shippers begin making alternate arrangements for routing their freight. As a potential strike date draws closer, shippers and importers should consider the following.

• Freight destined to the East or Gulf Coast ports via all-water routes must be on the water this week to arrive in time for containers to be off-loaded prior to the contract expiration.

• As we enter peak season and during the strike, all MLB services will be flooded with overbookings. Containers may be “rolled over” to alternate vessels/voyages in favour of shippers and importers considered by the carriers to be high priority. Importers should pad their supply chain transit times with an additional two to three weeks.

Bookings should be made early. Importers should work with overseas suppliers to project the availability of goods 14 to 21 days out, well in advance of goods being delivered to the overseas port. Loading delays can be expected overseas unless plans are made beforehand

The above article was contributed by A.N. Deringer, Inc., a provider of international logistics services.