As of Midnight, the long-feared strike by the ILA has actually become a reality. This means that all U.S. East and Gulf Coast ports are shut down until further notice. This is the first such work stoppage affecting the 36 ports since way back in 1977. While some progress in talks was reported last evening, the 45,000 members of the International Longshoremen’s Association went on strike anyway.
As a result of this work stoppage, no cargo will be able to move in or out of any of the affected ports. Additionally, some sources have stated that we should expect the strike to last at least one-to-two weeks and that severe backlogs and congestion might continue well into the next year.
Shippers with cargo already in transit to U.S. East and Gulf Coast ports can expect to have their cargo trapped at sea. If the strike lasts longer than expected it is possible that carriers may declare “Force Majeure” and unload all cargo bound for U.S. East and Gulf Coast ports at a neighboring international port.
Additionally, all containers in each of the U.S. East or Gulf Coast ports are now trapped and it is possible that those containers will be subject to detention and demurrage charges. Also, carriers have said that they will not cover or reimburse any chassis or other third-party charges connected to the work stoppage.
Finally, with this being an election year, we assume the government will not want to alienate any union workers by immediately implementing so called back to work legislation. However, a prolonged work stoppage can create additional hardship on the US economy that the government certainly does not want to see happen either. A rock and a hard spot situation for sure.
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