We can all breathe a little easier now that the ILA strike is over. Or is it? Although it is temporarily suspended and won’t be addressed until January of next year, there is still a key issue on the table. This being the use of port AUTOMATION. This is no small item to tackle. It has always been the union’s contention that loss of jobs due to automation is a key sticking point in any negotiations and final resolution with the union. So, although we can get goods in or out through the ports for right now, it would still be prudent to make sure that you have a backup plan in place

Here are some recommendations for the next steps as it usually takes a week for every day the strike lasted, for the network to get back into normal flows.

1. Assess Inventory: do any gaps exist or is there excess stock caused by the strike?
2. Carrier Communication: confirm service availability and transit times. Operations still need to be ramped up.
3. Expect Delays: residual delays will occur as the network reverts to normal.
4. Prioritize: identify and prioritize critical shipments. Expedite if necessary.
5. Monitor the Market: stay updated on any changes in rates and/or availability. Rates and capacity availability tend to fluctuate after strikes finish.
6. Update Stakeholders: it is important to keep your customers abreast of what you are doing and what they should expect as an impact on their orders.
7. Force Majeure: check your contracts for any clauses related to disruptions that may affect your obligations.
8. Re-evaluate Strategy: plan for the next strike ahead of time to avoid disruptions.

Looking at and doing some or all of the above steps should help you navigate the post-strike situation more effectively. The time it takes for the supply chain to return to normal after the ILA strike settlement can vary widely, but generally, you might expect a few key impacts in both the short term and long term:

Shorter Term Impacts

1. Cleanup:
   • Ports and terminals will likely experience temporary congestion as they work to process delayed shipments.
2. Reset:
   • Delays will persist as ports catch up on handling delayed containers so this will create ripple effects across the supply chain.
3. Freight:
   • Freight rates may spike, especially spot rates, as carriers and shippers adjust.

4. Labor:

1. • Tensions linger between port operators and workers as they adjust to the terms of the settlement, which means operational disruptions until the issues are ironed out.
2. Network:
   • Diverted cargo at other ports will cause overall network congestion and delays.

Long-Term Impacts

1. Stability:
   • Hopefully, labor relations will stabilize leading to a predictable operating environment at ILA-managed ports.
2. Cost:
   • Port operating costs will rise with wages and benefits, so the increases eventually are passed on to shippers and consumers in higher shipping fees and the costs of goods sold.
3. Operations:
   • The settlement should allow for improvements in operations and policies that tend to improve efficiency and lower overall costs.
4. Strategy:
   • Shippers should evaluate their dependence on certain ports and routes and look to diversifying their logistics networks to mitigate risk.
5. Future Negotiations:
   • The contract sets a precedent for future labor negotiations, not just for the ILA but for other port labor unions as well.

In the short term, you will still see and experience some residual disruptions in the logistics network. These should taper off as the system clears its backlog. In the long term, the settlement should provide more stability and predictability for the shipping industry, though there may be some cost implications and shifts in logistics strategies over time. Please just remember that they still haven’t fully settled, they have just delayed things until next year. It’s a good positive first step to settlement, but it isn’t done yet!