Navigating the Recent Port Strikes and Its Ripple Effects - OTR Solutions

Navigating the Recent Port Strikes and Its Ripple Effects

Published on: October 7, 2024

On October 1, 2024, 45,000 workers of the International Longshoremen’s Association (ILA) initiated a strike, impacting 36 ports along the East and Gulf Coasts. The ILA’s demands are centered on better wages, safer working conditions, and protections against the growing threat of automated technologies that could replace human labor. The union had given the United States Maritime Alliance (USMX) a deadline of September 31, 2024, to propose solutions and avoid a strike. While the USMX was open to negotiating on wages and certain technological advancements, they had not reached an agreement regarding safeguards for ILA workers against automation, which ultimately triggered the strike. 

The strike was suspended on the evening of October 3rd, with union workers agreeing to return to work on October 4th. The USMX now has until January 15, 2025, to finalize a new agreement, which includes a 62% wage increase for ILA workers over a six-year period. If an agreement is not reached by that deadline, another strike could occur. 

The timing of the strike was particularly significant, coinciding with the ramp-up of holiday freight and the recent damage caused by Hurricane Helene. Prolonged disruptions could have severely impacted the efficiency of holiday shipping, further straining the supply chain. Although the ILA strike lasted just three days, experts estimate that it could take five to seven days of recovery for every day of the strike, due to backlogs and delays. 

We strongly urge all carriers to stay up to date on the status of the suspension and the strike’s impact as it will likely have an affect your authority. Below are a few easy tips we recommend doing. 

 

How Trucking Companies Can Minimize Disruption 

The recent port strikes have had a profound impact on the trucking industry, creating significant delays in the movement of goods and putting increased pressure on supply chains. With thousands of containers stuck at ports, trucking companies face challenges, strained resources and missed deadlines. However, with strategic planning and proactive measures, you can navigate these disruptions more effectively. 

Here are some actionable tips to help trucking companies stay resilient during and after the port strikes: 

 

1. Charge for Stored Containers and Chassis 

With ports shutting down or operating at limited capacity, many companies are forced to store containers or chassis for longer periods than usual. To recoup costs, consider adding storage fees to your contracts or invoices for containers or chassis that couldn’t be returned to the port on time. It’s essential to communicate this with the freight brokers upfront to avoid any misunderstandings. Ensure transparency by outlining the reasons for the charges, such as strike-related delays, and get all agreed-upon terms in writing.  

 

2. Diversify Routes and Ports 

If a future strike is looming, look for alternative ports that might not be impacted by strikes or congestion. Expanding to smaller, regional ports could help alleviate pressure on your business and offer more consistent movement of goods. In addition, collaborating with freight forwarders or logistics companies that have access to other routes and resources can help keep shipments moving despite closures at major ports. 

 

3. Reevaluate Your Detention and Demurrage Policies 

During strikes, it’s common for containers to be delayed for pick-up or delivery, leading to detention and demurrage charges. Make sure your rate contracts have clear terms outlining the broker’s responsibility for these fees. Additionally, review port-specific regulations to determine whether truckers can apply for waivers or reductions in per diem fees during strike-related delays. 

 

4. Stay Informed on Union Negotiations 

Union negotiations can be long and complex, so staying informed on the latest developments will give you a leg-up in planning your operations. Engage in regular communication with your industry associations, legal teams, and port authorities to be aware of any resolutions or changes in strike conditions. This will allow you to proactively adjust your strategy and minimize further disruption. 

 

5. Communicate with Freight Brokers Proactively 

Freight broker communication is key during strikes. Ask your contacts to keep you informed about potential delays and set realistic expectations for delivery timelines. Providing frequent updates shows that you are on top of the situation, which can strengthen relationships even during challenging times. 

 

6. Plan for Potential Fuel and Labor Shortages 

During the aftermath of strikes, fuel costs and driver availability may fluctuate due to increased demand and delays. Plan ahead by increasing fuel reserves and implementing contingency plans for capacity shortages.  

 

Conclusion 

Port strikes are an inevitable challenge for the trucking industry, but with proactive strategies, you can minimize disruptions and even find lucrative opportunities. Whether by charging for stored containers, diversifying routes, or strengthening broker communication, these actions will help weather the chaos. The key is to remain adaptable, transparent, and well-prepared for the unexpected. 

By implementing these strategies, your trucking company can better navigate current and future challenges, ensuring your resiliency. 

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