Jamaica braces for ILA strike, potential economic fallout

THE IMPENDING strike by the International Longshoremen’s Association (ILA) is sending jolts through the local maritime sector, raising concerns about potential disruptions to trade flows and economic impacts.

The ILA, North America’s largest union with over 85,000 port workers, has threatened to strike on October 1, if a new contract agreement with the United States Maritime Alliance (USMX) is not reached. According to a CNBC report, if successful, the strike would shut down five of the 10 busiest ports in North America, including the Port of New York/New Jersey, a major gateway for Caribbean trade.

“The tens of thousands of International Longshoremen’s Association longshore workers at ports from Maine to Texas are united as never before in their determination to win a new contract with their employers represented by United States Maritime Alliance,” an ILA statement declared, adding, “In two weeks, they are ready to strike for wages that are commensurate with the billion-dollar profits earned by the ocean carriers.”

The potential impact of the strike on the Caribbean region is significant. Close to half of all monthly US imports pass through these ports, representing billions of dollars in trade. Any disruption would have cascading effects on supply chains, impacting businesses and consumers across the region.

A shipping line executive who wished to remain anonymous said options are difficult to come by as several terminals are already at capacity. The executive said an ILA strike “would be a mess for us as we do not have very suitable alternatives. Everywhere we go the terminals are full. Cristobal is full, Cartagena is full, Caucedo is full and, I believe, Freeport also. So that is the situation, I am not sure what our people will do.”

In preparation for the strike, the representative said its larger customers who have predictable cargo volumes and schedules are aware of the situation and coordinating with its offices, advising they should keep abreast of the changing circumstances and coordinate with agents to discuss their options.

President of the Shipping Association of Jamaica Corah Ann Robertson-Sylvester said the possible strike could have severe implications for Jamaica. “This is of great concern to the shipping community worldwide and also in Jamaica specifically because it will affect our exports and our imports coming from the North-East and from the Gulf,” she said, noting there would be considerable congestion at ports which would lead to delays.

Numerous logistics firms are scrambling to prepare for the potential strike, implementing contingency plans similar to those used during the COVID-19 pandemic. In the past week, Pas Cargo USA, a global supplier of transport and logistics solutions, urged its customers to provide shipping instructions by yesterday, September 23 for its sailing week to “prioritise and plan shipments effectively to minimise any impact on your supply chain caused by the strike”.

However, the scale of the potential disruption is immense. With nearly 150 vessels reportedly en route to the East Coast and Gulf ports, a strike could lead to significant delays and congestion. It could also have ripple effects on other ports as cargo is diverted to avoid disruptions, CNBC reported.

Kingston Freeport Terminal Limited’s (KFTL) CEO Captain Jedrzej Mierzewski, said “Globally, the industry is under a lot of pressure and, as a result, ports in the region are heavily congested. We have been encouraging our local importers to ship goods early in anticipation of a very busy peak season.

“An ILA strike would shut down some of the busiest US ports along the East and Gulf Coasts. Now, some of the regular services calling Kingston also call at these ports so there would be an immediate impact on schedule reliability and resource planning which would naturally worsen the longer the strike lasts. It is quite unpredictable, but KFTL is watching the situation closely to alleviate disruptions to supply chains as far as possible,” Mierzewski continued.

The ILA and USMX remain at odds over wages and automation, with the union demanding higher pay and protection against job losses due to automation.

The Biden administration has urged both parties to return to the bargaining table but has ruled out using the Taft-Hartley Act to force workers back to work, Reuters reported. The Taft-Hartley Act, passed in 1947, amended the National Labor Relations Act to give employers more power in labour negotiations. It was further amended to protect employees’ rights from unfair practices by unions.

As the October 1st deadline approaches, the situation remains tense, and the outcome of the negotiations will have far-reaching implications.