On the 1st of October, the East and Gulf Coast strikes shut down numerous ports, causing significant labour and supply chain disruptions. Every major East and Gulf Coast port were striking, closing trade gateways and choking off the flow of imports and exports shipped in containers in and out of the U.S.
Approximately 50,000 workers at ports from Maine to Texas, went on strike as they rallied for higher pay and job protection. The strike, affecting 36 ports, marked a historic event and is the first by the union since 1977.
The work stoppage came after negotiations stalled between the union representing dockworkers, the International Longshoremen’s Association (ILA), and the United States Maritime Alliance (USMX), representing container carriers, terminal operators and port authorities, with both sides issuing conflicting statements about their willingness to bargain.
The strikes were settled in record time, with the ILA winning a historic wage increase from the USMX, putting port workers back to work within 3 days. The East and Gulf Coast ports, handle a substantial share of goods into the U.S. and could have resulted in product shortages and higher consumer prices, just before the holiday shopping period.
Cargo started flowing again with a swift contract extension, however the temporary extension is only until January 15th. If the ILA and USMX do not come to an agreement, especially on the topic of automation enhancements for the industry, the workers may end up on strike again.
Since the pandemic, the acceleration of industries using automation, from inventory management, robotics, automated vehicles, chatbots and AI virtual assistants, has been substantial. The negative effects have been on employment, customer experience and social responsibility to human workers.
The ILA is wanting protections in the future contract against the loss of port worker jobs to remote-controlled or fully automated machinery. The protection against automation seems to be the most difficult point for USMX to agree to since many other industries have turned to automation to increase productivity, streamline operations and cut costs.
If the labour fight is not resolved, and the first mass work stoppage at East and Gulf Coast ports in nearly half a century – happens, we’ll see increased transit times and higher shipping costs, as shipments are diverted to the West Coast, placed on various freight networks and shipped East.
With the ILA and USMX reaching a tentative deal on wage increases, that still leaves the contentious issue of port automation to be resolved by January 15th. Even though everyone breathed a sigh of relief over the tentative agreement, the critical issue of automation vs. the roughly 90-days until the deadline, may not be enough time to work out a final deal.
There’s cause for concern this side of the border too, as billions of dollars worth of goods cross the U.S.-Canada border every day. A large number of imports come into Canada through the U.S. East and Gulf Coast ports, which are able to handle far more capacity than the Port of Halifax and Port of Montreal, the two main Canadian shipping points on the Atlantic. A shutdown of those U.S. ports would threaten the delivery of much of those goods and jeopardize the livelihoods of workers across multiple industries on both sides of the border.
Canada is not without its own challenges and seen a work stoppage at the country’s two main railways, an 8-day strike by employees on the locks of the St. Lawrence Seaway, a 13-day strike by B.C. dockworkers that shut down Canada’s biggest port, and in Montreal, longshore workers various job action strikes in recent years.
The Canadian federal government often promptly intervenes, orders parties to a labour dispute to end labour stoppages, and imposes binding arbitration. As seen in the strike that shut down the country’s two major railways. The decision was made by the Canada Industrial Relations Board (CIRB), to impose binding arbitration on the Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), following an unprecedented dual work stoppage that halted all rail freight shipments.
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