A strike across US East and Gulf Coast ports is looking increasingly likely today, as the White House confirmed it will not invoke its legal authority to intervene in the ongoing labour dispute. This response comes after 177 trade associations sent an urgent letter requesting government action to avoid a strike that could cripple supply chains across the country.
The US Maritime Alliance (USMX), representing terminal employers, welcomed the plea, calling on the government to “immediately work with both parties to resume contract negotiations and prevent disruption to port operations and cargo flow.”
While the White House had previously intervened to prevent strike action, the current stance is to allow the International Longshoremen’s Association (ILA) and USMX to negotiate independently. A collective strike, however, could significantly damage the economy just as inflation trends downward. The letter sent by trade associations warned that such a disruption could have “devastating effects” on businesses that rely on fluid port operations.
The Growing Tension and the Stakes at Hand
The White House does have a powerful tool in the form of the 1947 Taft-Hartley Act, which allows for an 80-day cooling-off period if a strike is deemed to threaten national health or safety. However, the administration made it clear that it is not considering invoking this act. “We’ve never used Taft-Hartley to break a strike and are not considering it now,” a White House spokesperson told Reuters.
Both politics and trade are heavily intertwined in this matter. The Democratic Party, currently in an election year, is leaning towards supporting the unions. Still, a potential strike could have severe repercussions for the economy, leaving the administration in a difficult position.
Industry observers also speculate that ILA President Harold Daggett is aiming for a historic agreement that would solidify his legacy. Daggett has continued to take a firm stance, stating, “A sleeping giant is ready to roar on Tuesday 1 October if a new master contract agreement is not in place. My members have been preparing for over a year for the possibility of a strike.”
Preparing for Disruption: Real-Time Data Key to Mitigating Risk
As the threat of a strike looms, shippers and logistics service providers (LSPs) are advised to prepare contingency plans. Angel Rodriguez, president of forwarder ASF Air, emphasised that shippers should be seeking alternatives and discussing solutions with service providers. “Shippers should be discussing contingency plans with their service providers now, to identify solutions, including air freight, that will keep their production lines moving undisturbed,” Rodriguez said. He noted that many clients have already begun securing full and part-charter flights to ensure they have sufficient stock in case of disruption.
If the strike materialises, air freight is expected to become exceptionally busy in Q4, with costs potentially skyrocketing as shippers look to air cargo to sidestep the effects of a port shutdown. But air freight is only one part of the solution.
Real-Time Visibility: A Critical Edge in Uncertain Times
In this volatile environment, the need for real-time data insights and supply chain visibility has never been clearer. The implementation of supply chain software capable of providing instant, actionable information is essential for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make business-critical decisions quickly. With real-time visibility, companies can better manage inventory, pivot to alternative transportation options, and mitigate risks related to strikes and other unforeseen disruptions.
Moreover, supply chain visibility tools can monitor climate impact and optimise routes to reduce environmental footprints, further aligning with sustainability goals. With the looming strike, businesses equipped with these tools will be in a far stronger position to counteract the economic and operational impacts on their supply chains.
The stakes are high, and as the clock ticks down to 1 October, companies must arm themselves with the technology and insights necessary to weather whatever disruption lies ahead.