With the ILA strike looming and a potential shutdown of five of the 10 busiest North American ports, a transportation lawyer has put together some quotes on the situation and impact to supply chains and the maritime industry.
Han Deng, transportation partner at law firm Reed Smith, said: “The port labor threat has been a concern for U.S. retailers for months, since the union announced in June a stall in negation discussions. This drove an increase in deliveries in the early part of 2024, and has caused some shippers to refocus their operations on East Coast ports. If the strike does occur, we have reason to envision a detrimental effect on shippers of U.S.-bound goods. Not only will there be a potential surge in freight costs, but we also anticipate it impacting the ability of retailers to meet the demand for winter holiday operations in the U.S.
“U.S. ports are gateways for a large portion of North America’s trade. The potential strike would also have significant global shipping and economic consequences, disrupting supply chains and trade flows between the U.S. and its key trading partners in the rest of the world as a ripple effect. As we have witnessed massive backlogs at ports, supply chain disruptions, delayed shipping schedules and altered shipping routes through recent history, such as the COVID-19 global pandemic and the March 2024 Baltimore Bridge collapse, similar things would happen again.”
“The port of New York and New Jersey will be among those affected if the strike occurs. According to nonprofit research group Mitre, the port of New York and New Jersey could see a daily loss of around $640 million.
“The port of New York and New Jersey is one of the busiest ports in the United States. It is no surprise, then, that the Port Authority of New York and New Jersey (PANYNJ) is trying to increase operations as much as possible ahead of the looming deadline. This includes encouraging shippers to delivery as much cargo as possible and coordinating with partners across the supply chain. According to the PANYNJ, approximately $240 billion in goods is moved through the port each year.
“A similar ILA strike in 1977 paralyzed ports for 44 days, showcasing the high stakes of this dispute. Sea Intelligence has estimated a one-day strike by the ILA would take five days to clear. The effect of such a strike could last long even after it is resolved, with the disruptions mentioned above taking weeks or months to recover, in a high inflation economy with regional conflicts and geopolitical uncertainty.”
