The recent port strikes in the U.S. and Canada sent shockwaves through the logistics industry, halting operations at major ports and threatening to disrupt supply chains globally. While dockworkers and employers reached a tentative agreement that has paused the strike, the resolution is temporary, and critical issues remain unresolved. With operations to resume in January 2025, businesses grapple with lingering backlogs and potential future delays.
How It All Started
The strike in the U.S. began on October 1, 2024, following the expiration of a contract between the port workers and the ports due to disagreements about compensation for workers and the use of automation. Dockworkers at 36 ports across the U.S. halted operations, demanding higher wages and voicing concerns over the potential loss of their jobs due to automation. The International Longshoremen's Association (ILA), representing thousands of workers, managed to secure a conditional 62% wage increase. However, this offer remains tentative, with negotiations extended until January 15, 2025.
A month later, a tense situation spread to a bordering Canada. Montreal has faced a union-enforced overtime ban for weeks, a 24-hour complete walkout and two of its terminals going into an indefinite strike on October 31st. Meanwhile, west coast ports like Vancouver joined the movement on November 4th, when The International Longshore and Warehouse Union Ship & Dock Foremen Local 514 (The ILWU Local 514) began industry-wide strike activity at British Columbia Maritime Employers' Association (BCMEA) terminals and initiated of lock-out later that day, which continued for 7 to 10 days.
What Happens Next
The U.S. dockworkers agreed to suspend a strike until mid-January, securing a conditional 62% wage increase. Meanwhile, all Canadian ports and terminals reopened after the Canada Industrial Relations Board (CIRB) ordered workers to return to work.
While the immediate impact of the strike has been mitigated in both countries, the work stoppage has resulted in a huge backlog of containers and shippers likely to face a new wave of detention and demurrage (D&D) charges.
According to The Loadstar, backlogs are not just limited to the strike-hit ports. Several rail terminals had to halt operations during the dispute and have become heavily congested, while some ports without strike action have also been affected.
Experts estimate that if the strikes had continued in the U.S., the strike could have cost the country's economy billions a day. Although workers are back on the job, the potential for further disruption looms large, especially if negotiations fall through in January.
The situation becomes even more volatile because of its timing. The already-started holiday season is expected to be a record-breaking year, with holiday sales predicted to exceed $240.8 billion in revenue globally, marking an 8.4% year-over-year growth.
How the Strike Affects Your Business
Many ports in the U.S. and Canada are experiencing significant backlogs, which can delay shipments, raise freight costs, and strain supply chains. Businesses that rely on timely deliveries must prepare for extended lead times and explore alternative routes or logistics solutions.
Proactive Solutions for Supply Chain Resilience
During times of uncertainty, businesses need to act swiftly to minimise risks. Here are some strategies to keep your supply chain resilient:
Diversify Shipping Routes: Consider using alternate ports or modes of transportation to avoid the most congested areas.
Adjust Inventory Management: Stock up on essential goods to cushion against potential delays.
Partner with a Reliable Logistics Provider: Working with an expert logistics partner, such as KATA Global Logistics, can help you navigate these challenges effectively. We can provide real-time updates on port conditions, reroute shipments, and develop contingency plans tailored to your needs.
Although the strike has been paused, the road ahead remains uncertain. With negotiations in the U.S. set to continue into 2025 and The ILWU Local 514 not being happy with the government's decision, businesses must stay vigilant and proactive in protecting their supply chains. It is never too late to reassess your logistics strategy, address vulnerabilities, and partner with experienced providers like KATA Global Logistics to ensure seamless operations, no matter what the future holds.
Contact KATA today for expert support and logistics solutions that keep your business moving forward despite the challenges.
Comments