Port Strike Update
September 6th, 2012
Possible Port Strike September 30th, 2012
Background
Waterfront labor in most U.S. East Coast and Gulf ports is represented by the International Longshoremen’s Association (ILA). On the management side employers in 1997 established the United States Maritime Alliance (USMX). USMX is an association of port authorities, stevedores and terminal operators as well as container
Shipping Lines.
The current Master Contract covering ports between Maine and Texas was entered into by the two parties in 2004 and was extended two years ago until September 30, 2012.
After initially making good progress towards a new contract, the talks collapsed on August 22, 2012. One of the major disputes centers around work rules, particularly in the Port of New York. No further meetings have been scheduled and we consider the risk of a strike as of October 1, 2012 as a possibility.
At CWW we have reviewed and implemented our contingency planning and will provide updates as significant changes or events occur leading up to the possible strike dates.
Below are some FAQ’s:
Question: Will the Federal Government step in?
Answer: The Federal Government under the Taft-Hartley Act can declare a “national
Emergency” and enjoin any work stoppage for 80 days.
Question: Can a strike happen earlier than October 1, 2012?
Answer: The current contract contains a “no strike” provision and the earliest work stoppage can happen at midnight on September 30, 2012.
Question: Will the threat of a strike affect vessel schedules?
Answer: Yes, the carriers are planning contingency schedules that will vary by service lane. Once finalized, they will be communicated to our customers to reduce the impact of delays and disruptions.
Question: After a strike is declared can I still receive or deliver containers at the affected
port terminals?
Answer: No, the terminal gates will be closed and no receiving or delivering of cargo will be possible.
Question: Can I route any cargo via the West Coast?
Answer: Yes, CWW can provide alternative routings and service to all destinations with various carriers. Please contact your CWW Account Executive to discuss these options if you feel it is necessary.
Question: Will there be additional expenses as a function of a strike.
Answer: While we will try to mitigate any additional cost exposure, it must be assumed that increased expenses will occur. It is impossible at this time to quantify this further.
We will give proper notice as soon as we have a better handle on this aspect. Some carriers have already proposed a “Port Congestion Surcharge” that would go into effect should a strike occur. The proposed costs are listed below:
Effective October 5, 2012, a Port Congestion Surcharge to all shipments loaded or discharged at ports in the United States and Canada during any period of labor unrest. The Port Congestion Surcharge shall be assessed as follows:
$800/D20
$1000/D40
$1100/H40
$1266/H45
$1600/H53
Please note that this surcharge has been adopted as a precautionary measure to address the effects of potential labor action. Should there be no labor action affecting cargo movement to or from U.S. and Canadian ports, the carriers may nullify this rule.
Question: How will I be informed on the further developments?
Answer: CWW will publish regular updates as significant events or changes occur.