Automotive Parts Supply Chain Threatened by Potential Dockworkers Strike
A potential strike among dockworkers in the East Coast may bring with it impacts on the automotive industry’s supply chain, according to Automotive Logistics.
The International Longshoremen’s Association represents more than 85,000 dockworkers, with its operations spanning much of North America’s east coast. It operates ports in cities including Boston, New York, Philadelphia, Baltimore, Hampton Roads, Wilmington, Charleston, Savannah, Jacksonville, Miami, Tampa, Mobile, New Orleans, and Houston.
With the current contract between ILA and the United States Maritime Alliance, a group representing dock employers, set to expire at the end of September, ILA is asking for higher wages proportionate with the billions of dollars in profit ocean carriers are currently making.
Little headway has been made in these discussions, though, with talks between ILA and USMX hitting a brick wall in June. If no agreement is made before Sept. 30, the ILA has said dockworkers will immediately begin striking.
With most of the ports operated by ILA members having to do with automotive parts and inbound logistics, a strike is expected to disrupt these supply chains.
With the collapse of the Francis Scott Key Bridge earlier this year, other ports in Baltimore and nearby in New York, Norfolk, and Philadelphia have already been under additional strain. Additionally, September is usually one of the busiest months for U.S. container imports, which last month rose by 13% from last year.
Shipping company Maersk has issued notices warning that potential strikes, even if brief, may result in backlogs that will take weeks to correct.
Christian Roeloffs, co-founder and CEO of shipping marketplace Container xChange, shared that as a potential strike comes closer, there may be a burst of demand for companies to secure leased containers.
However, efforts made earlier in the year to avoid supply chain disruptions may help offset the rise in demand for container cargo, Roeloffs added.
“This stockpile will act as an essential buffer, mitigating the risk of container rates spiking dramatically due to the strikes,” said Roeloffs.
