Update on Eastern U.S. Terminal Developments
Maersk recently issued an update on the ongoing negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). The company announced:
“As of now, there has been no progress in the negotiations.”
In light of this situation, Maersk strongly recommends that customers retrieve full containers and return empty ones at terminals on the U.S. East Coast and the Gulf of Mexico before January 15, 2025.
Key Details and Recommendations
Maersk explained that this measure aims to mitigate the potential impact of a dockworker strike. The company emphasized its commitment to proactively developing contingency plans to ensure business continuity for its clients.
Potential Disruptions and Additional Charges
To address the looming risk of strikes, several shipping lines have recently announced surcharges:
- Hapag-Lloyd:
- Introduced Work Disruption Surcharge (WDS) and Work Interruption Destination Surcharge (WID).
- These fees will only apply if supply chain disruptions occur and will affect cargo operations performed on or after January 20, 2025. Containers already in transit or completed before this date are exempt.
- ZIM:
- Announced a Strike Surcharge for all cargo to and from U.S. East Coast and Gulf terminals, effective January 10, 2025 (arrival date).
- Rates: $1,000/TEU and $2,000/FEU.
Background on ILA-USMX Disputes
The labor tensions trace back to the ILA strike on October 1, 2024, which involved 36 ports and 50,000 dockworkers across the U.S. East Coast and the Gulf of Mexico. This marked the first major strike by the ILA since 1977.
Key outcomes of the 2024 strike included:
- USMX agreeing to a preliminary wage increase of 61.5% over six years.
- Extension of the master contract to January 15, 2025.
- No resolution on sensitive issues like port automation.
Subsequent negotiations have failed to yield a consensus on automation, with the ILA stating the talks have “broken down.” The union has reiterated its commitment to securing a fair contract and warned that a strike remains a last resort.
What Lies Ahead?
Industry analysts believe that without significant concessions on automation, there is a high likelihood of another strike in January 2025.
Customer Action Plan
To minimize risks, Maersk recommends customers:
- Retrieve full containers and return empties by January 15, 2025.
- Stay updated on terminal operations and contingency plans.
- Prepare for potential disruptions and additional fees if a strike occurs.
