ALERTS & ​ADVISORIES

Negotiations Stall Between ILA and USMX: Urgent Impact on Your Business

By
September 30, 2024
Negotiations Stall Between ILA and USMX: Urgent Impact on Your Business
Negotiations Stall Between ILA and USMX: Urgent Impact on Your Business

With key issues such as wages and automation unresolved, talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have broken down. If no agreement is reached by September 30, 2024, the ILA plans to initiate a strike on October 1, 2024, which will have significant consequences for businesses relying on U.S. East and Gulf Coast ports.

What This Means for Your Business:

The ILA represents workers at major U.S. container ports, and a strike could result in:

  • A halt to container operations at over half of U.S. ports.
  • Major delays at East and Gulf Coast entry points.
  • Prolonged transit times and rerouted vessels, leading to increased shipping costs.
  • Cargo stranded at ports, triggering costly storage and detention fees.
  • A ripple effect across industries during the peak season, from importers to retailers.
  • Heightened global shipping congestion and elevated freight rates.

Key Updates:

  • Vessel Rerouting: Hapag-Lloyd and ONE have already adjusted operations, rerouting 11 vessels to alternative ports. For example, "Alessia" (AN2 service) will offload Houston and New Orleans-bound cargo in Cartagena, Colombia, while "Tempanos" (ANG service) will discharge similar cargo in Altamira, Mexico, on October 1. ONE plans to return the cargo to the U.S. once the strike ends.
  • Updated Surcharges: ONE has announced updated strike-related surcharges: CGD (except China) at $2,000/40' and CON (China) at $1,000/40', reflecting different regulatory requirements. MSC has also introduced a $3,000/40' Emergency Operation Surcharge (EOS) from China, Japan, Korea, and Southeast Asia, effective October 27.
  • Reefer Cargo: MSC will continue accepting dry container bookings into USEC and USGC but reserves the right to reject reefer bookings and will not assume liability for those left in strike-affected terminals.

Recommendations for Shippers:

  • Prepare for West Coast Congestion: As many shippers reroute to West Coast ports, anticipate longer wait times, increased fees, and congestion.
  • Expect Delays: In-transit cargo bound for East and Gulf Coast ports will face docking delays, with backlogs persisting even after a strike ends.
  • Consider Air Freight: For time-sensitive shipments, air freight remains the fastest alternative. JAS offers multiple air cargo solutions.
  • Plan for Higher Costs: Shipping rates will rise due to increased demand, while delays will lead to higher demurrage, detention, and storage fees.
  • Review Incoterms: Ensure clarity on financial responsibilities for delays and fees as determined by Incoterms. Be prepared to manage rerouting and storage costs.

To mitigate potential disruption, JAS has contingency plans ready. We recommend exploring alternative logistics solutions, such as air freight for high-priority shipments and can assist with rerouting options. Contact your JAS representative to discuss tailored strategies for keeping your cargo moving smoothly amid these challenges.

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After walking away from talks in November 2024, the ILA has signaled the possibility of a renewed strike if their demands are not addressed before the January 15, 2025, deadline.

Potential for Renewed ILA Strike Over Automation Disputes

Negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) have reached a critical impasse, primarily due to disagreements over port automation. After walking away from talks in November 2024, the ILA has signaled the possibility of a renewed strike if their demands are not addressed before the January 15, 2025, deadline.

This situation follows a previous three-day strike in early October 2024, which temporarily halted operations at ports along the East and Gulf Coasts. While those ports have since resumed operations, the disruption caused widespread delays and financial strain on the U.S. economy. The recent suspension of strike action was agreed upon for 90 days, ending January 15, 2025, but with negotiations stalled, the risk of further disruption looms large.

Impact of Previous Strike Action

The October strike caused significant delays, cost overruns, and operational disruptions, including:

  • Shutdowns at 36 ports handling over half of U.S. container volume.
  • Increased fees for freight storage, detention, and other services.
  • Prolonged transit times due to vessel rerouting.
  • Downstream effects on retailers and supply chains during peak season.

Mitigating Future Disruptions

To minimize risks, businesses should consider these strategies:

  1. Divert shipments to alternate ports, such as those on the West Coast.
  2. Anticipate congestion at rerouted locations.
  3. Leverage air freight for time-sensitive cargo.
  4. Utilize intermodal solutions for inland transportation.
  5. Be prepared for increased shipping costs and fees.
  6. Stay informed and work proactively with logistics partners to reduce delays.

Guidance from JAS

JAS remains committed to supporting clients during these uncertain times. If your operations are at risk of being impacted, we strongly encourage you to reach out to your JAS representative. Our team can provide tailored solutions to mitigate disruptions, streamline supply chains, and optimize freight options. Whether through alternative routing, expedited services, or strategic planning, JAS is here to help you navigate these challenges effectively.

XL Tanks from Netherlands to Sweden: A Seamless Logistics Solution

JAS Projects recently completed a comprehensive logistics solution for Gpi Tanks XL, a company specialized in stainless steel tank construction, either on-site or at one of their flexible construction locations near a waterway, as was the case with this project. This project involved transporting large industrial tanks from Zwijndrecht, Netherlands, to Uddevalla, Sweden, where they will be used to recycle de-icing liquid for major Scandinavian airports.

The operation in Zwijndrecht required careful coordination due to tidal constraints and limited water depth. With a maximum draft of 3.5 meters at the loading berth, and the vessel entering with a 3.2-meter draft, precise planning was critical. Using an overhead crane, the tanks were loaded onto trailers before being transferred to the vessel by a mobile crane. Despite facing high winds and a two-day delay due to storms, the entire loading process was completed in just six hours.

A 700-ton mobile crane was utilized during loading to maintain a safe 33-meter radius, ensuring no pressure was placed on the jetty. The vessel, sailing with open hatch covers to accommodate the tank height, ensured smooth and secure transport to Sweden.

Upon arrival at the client’s site in Uddevalla, discharge operations were executed efficiently. The tanks were unloaded and installed onto their foundations within ten hours. JAS Projects coordinated the movement of the first tank directly to its foundation, while the second was temporarily stored on steel stools. The team also managed a last-minute client request to arrange the installation of a walkway and spiral stairs.

This project exemplifies the JAS Projects’ team ability to overcome logistical challenges and deliver customized solutions with precision. From factory to foundation, JAS provides end-to-end logistics expertise, ensuring that every project is completed on time, safely, and with the highest level of care.

JAS Worldwide, a global leader in logistics and supply chain solutions, headquartered in Atlanta, USA, is excited to announce its collaboration with ALPHA Augmented Services.

Atlanta, USA – November 25, 2024 – JAS Worldwide, a global leader in logistics and supply chain solutions, headquartered in Atlanta, USA, is excited to announce its collaboration with ALPHA Augmented Services, a technology innovator in logistics optimization, headquartered in Zug, Switzerland. This partnership represents one of the many steps JAS is taking to integrate AI-driven solutions into a broader strategy for delivering sustainable, efficient, and innovative logistics solutions.  

 

As part of its innovation roadmap, JAS will incorporate ALPHA’s advanced AI technology to explore new ways of optimizing air, ocean, and road freight logistics. The collaboration aligns with JAS’s commitment to leverage emerging technologies to support its customers’ goals for cost efficiency and carbon footprint reduction, all without requiring significant capital investment.  

 

“This partnership with ALPHA reflects our ongoing strategy to integrate innovative tools with technology that complement JAS’s broader vision for sustainable and intelligent logistics solutions, said Andrea Goeman, SVP QHSE & Sustainability at JAS Worldwide. “ALPHA’s optimization capabilities are a valuable addition to our portfolio, offering our customers enhanced efficiency, operational savings, and a reduced carbon footprint for their shipments.” 

 

JAS remains dedicated to exploring technologies like ALPHA’s to advance its mission of creating smarter, greener logistics solutions. This partnership underscores JAS’s leadership in driving sustainability and innovation while maintaining its focus on a diversified approach to forward-thinking logistics solutions. 

 

About JAS Worldwide 

JAS Worldwide, a global leader in logistics and supply chain solutions, was founded in Milan, Italy, in 1978. Headquartered in Atlanta, Georgia, USA and supported by 7,000+ team members in more than 100 countries, it builds innovative and sustainable solutions that focus on customer needs and a better future for all. At the heart of JAS's success is its people who deliver customer value. As one of the largest and fastest growing family-owned logistics companies, JAS is committed to creating opportunities for our communities, customers, and colleagues to thrive. Together. 

 

About ALPHA Augmented Services 

Headquartered in Zug, Switzerland, ALPHA Augmented Services specializes in logistics optimization, helping businesses streamline their supply chains for greater efficiency and reduced environmental impact. ALPHA’s technology empowers companies to achieve operational excellence in logistics. 

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