Shippers may feel uneasy realizing that dockworker unions across North America are negotiating contracts simultaneously. Labor slowdowns and port disruptions are common during contract talks, leaving shippers with limited options. With the International Longshore & Warehouse Union (ILWU) still in prolonged negotiations at West Coast ports and the International Longshoremen’s Association (ILA) gearing up for contract discussions at East and Gulf Coast ports, the uncertainty intensifies. Many shippers have already rerouted cargo to East and Gulf Coast ports to avoid potential delays on the West Coast.

Falling shipping demand and cargo diversions have minimized disruptions so far. However, if peak season brings higher volumes and ILWU negotiations remain unresolved—or worsen—West Coast shippers could face serious challenges.

But what about the East and Gulf Coast ports? Could ILA negotiations pose similar risks? Moreover, ILWU and ILA aren't the only dockworker unions negotiating simultaneously.

Longshore Contract Negotiations Across North America

Hoping to bypass labor disputes by importing through Canada? Think again. According to the Journal of Commerce (JOC), six port worker unions will be in contract talks across North America by mid-year:

• ILWU (U.S. West Coast): Formal negotiations with employers have been ongoing for over 10 months.
• Los Angeles & Long Beach Clerical Workers: Negotiating a new contract, but talks may depend on ILWU reaching an agreement first.
• ILA (East & Gulf Coasts, U.S.): Engaged in early contract discussions, though formal negotiations have stalled.
• ILWU Canada (Vancouver & Prince Rupert): Negotiations began in early March, but wage disagreements could prolong talks for 16-18 months.
• Port of Montreal (Canada): Employers and port workers will soon negotiate a replacement for the current contract, which expires this year.
• Port of Halifax (Canada): Negotiations continue to replace a contract that expired in 2020.

ILA Negotiations: A Positive Outlook

Despite widespread contract discussions, the ILA negotiations provide a silver lining. Unlike the ILWU, the ILA has engaged in early talks with the United States Maritime Alliance (USMX) before the current contract expires in September 2024.

This proactive approach contrasts sharply with the ILWU’s stalled talks. Since July 1 of last year, ILWU members have worked without a contract, exposing ports and shippers to risks of strikes or slowdowns. The ILA, on the other hand, has increasingly favored early agreements, helping to secure market share for East and Gulf Coast ports.

As noted in the Wall Street Journal, shipping industry officials expect smoother negotiations for Gulf and East Coast ports. Additionally, ongoing investment in East Coast port infrastructure continues to enhance their import capacity.

Conclusion for Shippers

Despite contract negotiations across North America, shippers should prioritize East and Gulf Coast ports for discretionary cargo. The risk associated with ILWU negotiations remains significantly higher than that of the ILA. By planning strategically, shippers can minimize potential disruptions and maintain efficient supply chain operations.