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ILA, USMX said to resume talks on new master contract in November

The International Longshoremen’s Association (ILA) and maritime employers along the US East and Gulf coasts said Friday they will resume negotiations in November on the remaining terms of a new master contract following a tentative wage deal that ended a three-day dockworkers strike earlier this month.

The ILA and the United States Maritime Alliance (USMX) said in a joint statement talks will take place in New Jersey next month on a six-year master contract. After settling on a wage offer on Oct. 3 that would increase longshore pay 62%, the two sides agreed to a contract extension until Jan. 15 to negotiate other outstanding issues.

“The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the two sides said in the statement, adding that no further details about the negotiations will be available prior to those meetings.

The biggest remaining issue has to do with contractual language around the use of marine terminal automation and new technology. Under the previous master contract that expired at the end of September, the ILA and USMX allowed marine terminals to implement semi-automated equipment provided that both the union and terminal agreed on staffing. But it completely barred the development of fully automated terminals.

The ILA has struck a more hardline tone during this bargaining cycle, calling for a ban on the use of any type of automation.

“The ILA is steadfastly against any form of automation — full or semi — that replaces jobs or historical work functions,” the union said in an Oct. 1 statement, the day its members walked off the job. “We will not accept the loss of work and livelihood for our members due to automation.”

Source:

Angell, M. (2024c, October 25). Ila, USMX said to resume talks on new master contract in November. Journal of Commerce. https://www.joc.com/article/ila-usmx-said-to-resume-talks-on-new-master-contract-in-november-5778794

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Montreal says congestion risk grows as dockworkers refuse overtime

The Port of Montreal is warning shippers about the risk of delays and a growing container backlog due to dockworkers refusing overtime work. The port’s warning comes as Canada’s labor minister suggested a further cooling off period in hopes that a new mediator will help resolve the long standoff between Montreal’s longshore union and maritime employers.

The Montreal Port Authority (MPA) said the refusal by Local 375 of the Canadian Union of Public Employees (CUPE) to work overtime “could result in processing delays and a backlog of containers waiting to be handled” at the port. The port said in a statement Wednesday the delays would hit Montreal’s four main terminals for international container services, along with other related facilities.

The port said that up to 10 vessels expected to arrive at the port could face delays due to the overtime strike. Liquid bulk, grain handling and short-sea container service remain unaffected.

“The Montreal Port Authority remains concerned about the impact of pressure tactics on the logistics chain and on the supply of goods and commodities for businesses and the public,” the MPA said. “Our teams are actively working to minimize the impact of disruptions and ensure the smooth running of port activities.”

Local 375’s overtime strike stems from the latest hurdle in contract negotiations between the union and the Maritime Employers Association (MEA) over work scheduling. Along with the overtime strike, Montreal dockworkers hit two of Montreal’s busiest container terminals with a three-day work stoppage two weeks ago.

The union’s 1,200 members at Montreal have been without a contract since the end of 2023 despite federal mediators overseeing those talks since December.

The MEA said Wednesday that in a recent meeting with employers and the union, Canada’s Labor Minister Steve MacKinnon proposed that a “special mediator” be appointed, “so the parties can resume negotiations, without any pressure tactic from either party, for a period of 90 days.”

The MEA said it was considering MacKinnon’s proposal, with a response from employers and the union expected by Friday.

Source:

Angell, M. (2024b, October 17). Montreal says congestion risk grows as dockworkers refuse overtime. Journal of Commerce. https://www.joc.com/article/montreal-says-congestion-risk-grows-as-dockworkers-refuse-overtime-5751118

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Premier Alliance enhances network ahead of February launch

The Premier Alliance is upgrading a raft of its proposed services just weeks after announcing its trade network ahead of its February 2025 launch.

The group, comprising Ocean Network Express (ONE), HMM and Yang Ming Marine Transport, said the changes apply to two trans-Pacific services and an Asia-Mediterranean service.

The Premier partnership will replace THE Alliance when Hapag-Lloyd leaves to join Maersk in the Gemini Cooperation.

The biggest change to the original Premier network is its decision to split the Pacific North 3 loop linking Asia with the Pacific Northwest into two distinct services, PN3 and PN4. “This enhancement aims to provide faster transit times and improve schedule integrity and reliability,” ONE said in a customer advisory on Wednesday.

The alterations reduce the number of eastbound port calls to four for each service compared with six calls in the original PN3 schedule.

“Separation into two services will improve the transit times from the Chinese ports, especially from Qingdao,” Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, said in a LinkedIn post Thursday.

The revised PN3 rotation is Qingdao, Busan, Vancouver, Tacoma, Busan and Qingdao with a 15-day transit between Qingdao and Vancouver and 11 days from Busan to Vancouver. The rotation of the new PN4 service is Ningbo, Shanghai, Vancouver, Tacoma and Ningbo with 16 days from Ningbo to Vancouver and a 12-day journey between Shanghai and Vancouver.

The final upgrade is Premier’s move to add Jacksonville to its trans-Pacific East Coast North America 2 (EC2) service. The revised rotation is Xiamen, Yantian, Ningbo, Shanghai, Busan, Manzanillo (Panama), Savannah, Charleston, Jacksonville, Manzanillo, Busan and Xiamen.

Details please refer to the JOC news.

Source:

Wallis, K. (2024, October 17). Premier alliance enhances network ahead of February launch. Journal of Commerce. https://www.joc.com/article/premier-alliance-enhances-network-ahead-of-february-launch-5751123

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Maersk rules out Suez Canal routings for Gemini launch

Cargo owners’ need to plan Asia-Europe shipments for next year was behind Maersk and Hapag-Lloyd discarding the Suez Canal as an option when their new Gemini Cooperation network launches on Feb. 1 next year.

In the clearest signal yet that the carriers do not anticipate a return to Red Sea transits next year, and with shippers already preparing their 2025 contracts, Gemini decided to jettison the shorter route from its network and commit to the longer transit around southern Africa.

When the Suez routings are deemed safe from Houthi rebel attacks, the shift by ocean carriers will bring ‘havoc’ to container shipping schedules, said Maersk CCO Karsten Kildahl. Until then, Maersk customers needed lead time certainty so they can plan operations.

“The nightmare operation when the canal closed is nothing compared to what it is going to look like when it opens again,” Kildahl told reporters Wednesday at the naming ceremony of the dual-fuel Alexandra Maersk in Felixstowe.

“We will have several weeks of something that will look like an operational meltdown. It is not going to be smooth.”

When Gemini unveiled its updated network in September, the alliance offered Asia-Europe shippers alternative routings via the Cape of Good Hope and the Suez Canal. However, Maersk told customers in an advisory this week that the Red Sea situation remained “highly dynamic” and that Maersk and Hapag-Lloyd would only return to the route “when it is safe to do so.”

”The reality is that there are still attacks in the Red Sea and it is unsafe to be there. We have seen in the past that it looked safe, and carriers tried to go through, but it wasn’t safe and had to be undone again. You can’t just flip flop,” he said.

Details please refer to JOC news.

Source:

Knowler, G. (2024, October 10). Maersk rules out Suez Canal routings for Gemini Launch. Journal of Commerce. https://www.joc.com/article/maersk-rules-out-suez-canal-routings-for-gemini-launch-5746470

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Montreal dockworkers to refuse overtime in latest salvo against port employers

Dockworkers at the Port of Montreal will reject requests to work overtime beginning Thursday, part of the longshore union’s latest pressure campaign against management during the protracted negotiations for a new contract. The overtime strike will likely add to the ongoing productivity slump at Montreal following last week’s partial strike.

Local 375 of the Canadian Union of Public Employees (CUPE) said in a statement Monday that its members will refuse to work overtime starting Thursday for an indefinite period. Union representative Michel Murray said in the statement the overtime strike stems from a current roadblock in contract talks with Montreal’s Maritime Employers Association (MEA) over worker scheduling, among other issues.

“We’re willing to get down to intensive negotiations, but since the employer is dragging their feet, we’re turning up the pressure so that they can put forth the energy needed to find a solution,” Murray said.

Local 375 has been working without a new collective bargaining agreement since the end of 2023. The union and the MEA have been holding talks for a new contract under the auspices of Canada’s Federal Mediation and Conciliation Service.

The MEA said in a statement that Local 375’s decision to refuse overtime work “has a significant impact on deployed crews and the tasks required for operations.” It formally asked the union to withdraw the move, calling it a “pressure tactic” during negotiations.

Due to absenteeism, sick leave or cargo volumes, longshore work crews frequently need to be filled out with employees who will work an extra shift. It is particularly critical for specialized trades such as crane or equipment operators, who are necessary for an entire crew to work.

Now that overtime will be refused, the MEA said that “employees assigned to shifts with incomplete crews will not be paid.” The organization said that incomplete crews would adversely affect vessel productivity.

“This measure is necessary considering that incomplete shifts will cause imminent slowdowns or even halt operations at the port,” the MEA said. “The MEA reiterates its willingness to continue negotiations.”

‘Climate of uncertainty’

Local 375’s latest move follows a three-day strike its members staged last week against two of Montreal’s largest marine terminals, Viau and Maisonneuve, knocking out about 40% of the port’s container capacity.

One day into that strike, the Montreal Port Authority (MPA) said time-sensitive cargoes such as food, pharmaceuticals and medical products started backing up at the closed terminals. The MPA said the three-day strike caused five ships to back up outside of the port and delayed the handling of some 11,549 TEUs, approximately equivalent to 6,240 full-size containers.

MPA Chief Executive Julie Gascon said the stalled negotiations and resulting labor actions have created a “climate of uncertainty” for shippers using Montreal and that it will have “long-term impacts” on the port’s activity.

“Supply chain reliability is at the heart of port users’ business decisions, and that’s why I’m calling on both parties to return to the table and reassure the thousands of companies that rely on our services to export and import goods crucial to their operations,” Gascon said.

Source:

Angell, M. (2024, October 8). Montreal dockworkers to refuse overtime in latest salvo against Port Employers. Journal of Commerce. https://www.joc.com/article/montreal-dockworkers-to-refuse-overtime-in-latest-salvo-against-port-employers-5745362

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ILA, USMX agree on new wage offer and contract extension that reopens ports

Maritime employers and the International Longshoremen’s Association (ILA) have reached a tentative deal to reopen container terminals at East and Gulf Coast ports after trading new wage offers that would bring dockworker pay up over 60%. Longshore workers will work under a three-month contract extension until a formal deal is reached.

Official announcement of the breakthrough is expected Thursday evening, sources told the Journal of Commerce. The White House is scheduled to host a briefing Friday morning on the port strike. The ILA and United States Maritime Alliance (USMX), the employer group that represents ocean carrier and terminal operators in longshore contract negotiations, have yet to respond for a request for comment.

Ports are expected to reopen Friday.

Source:

Szakonyi, M., & Michael Angell, S. E. }. (2024, October 3). Ila, USMX agree on new wage offer and contract extension that reopens ports. Journal of Commerce. https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882

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Window to divert strike-affected imports to West Coast closing soon

Retailers and other importers who normally ship through the US East and Gulf coasts to destinations in the eastern half of the country say they have a short window to decide whether to begin rerouting goods through West Coast ports.

Three shippers, speaking on the condition of anonymity, told the Journal of Commerce that if the International Longshoremen’s Association (ILA) strike is resolved by the end of next week, they will likely continue to ship through East and Gulf coast ports. However, if it looks as though the strike will continue for more than a week, they must consider routings through US and Canadian West Coast ports, which would bring higher costs and possibly a limited capacity of the western railroads to handle a sustained surge of freight.

“I’m not going to make a knee-jerk reaction,” said an importer of furniture and home improvement merchandise who asked not to be identified. “Let’s see what happens, but once the pain of a week or two takes hold, there is the option to reroute through the West Coast.”

Those diversions “can make things worse from a cost and shipping cycle pattern,” the logistics manager acknowledged.

Jon Monroe, who serves as an adviser to non-vessel-operating common carriers (NVOs), said shippers have little choice but to divert freight if the strike drags on.

“They’ll have to transload through the West Coast,” he said. “There is no Plan B.”

Rail capacity concerns

Importers are concerned, however, about the capacity of the western railroads, inland rail hubs and distribution centers to handle a sustained surge of inland point intermodal (IPI) freight diverted from East and Gulf coast ports. They note that the BNSF and Union Pacific (UP) railroads are already handling record eastbound IPI volumes.

For their part, BNSF and UP say they have been preparing for a strong peak season on the West Coast and have pre-positioned sufficient intermodal assets in Southern California and the Pacific Northwest to handle cargo diversions should the ILA strike continue for several weeks.

In a Monday letter to Robert Primus, chairman of the US Surface Transportation Board, UP CEO Jim Vena said the railroad has established a “buffer of resources” to handle its growing intermodal traffic this fall that has been driven in part by a shift of cargo from the East and Gulf coast ports to the West Coast.

Details please refer to the JOC news.

Source:

Mongelluzzo, B. (2024, October 2). Window to divert strike-affected imports to west coast closing soon. Journal of Commerce. https://www.joc.com/article/window-to-divert-strike-affected-imports-to-west-coast-closing-soon-5741052

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Ships backing up outside of strike-shut US East, Gulf ports

Container ship anchorages are growing outside of US East and Gulf coast ports on the second day of a dockworker strike, with carriers offering limited options to avoid delays and currently planning to divert only a handful of vessels to alternative ports.

As of Wednesday, at least 64 container ships were scheduled call one of the 15 US ports affected by striking members of the International Longshoremen’s Association, according to data from Sea-web, a sister product of the Journal of Commerce within S&P Global.

As the largest strike-affected port and first call on most weekly services, half of the ships are destined for the Port of New York and New Jersey, with estimated arrivals until Nov. 1, Sea-Web data show. In the first week of October, some 13 ships are scheduled to arrive at the New York-New Jersey port.

In addition to those ships, Sea-web data shows another 13 ships are currently at the ports, sitting at anchorage, with nine outside the Port of Savannah alone. The Georgia Ports Authority said in a statement Wednesday that when Savannah reopens, it will have the yard space to deal with the backlog.

The vessels are operated by carrier members of the United States Maritime Alliance (USMX), the employer organization that negotiates collectively with the ILA. It does not include smaller carriers that are not affiliated with the USMX, nor vessels that call non-ILA marine terminals.

Sea-web data looks at port destinations listed through automatic identification systems with an expected arrival by Nov. 1.

Thus far, carriers have made minimal changes to vessel schedules due to the strike. Hapag-Lloyd advised shippers Tuesday that two vessels in its Caribbean Express Service (CES) that would have called the Port of Virginia this month will now call Canada’s Port of Saint John. The carrier’s US Gulf–South America (GS1) service that calls Houston and New Orleans will instead discharge at the Mexican ports of Altamira or Veracruz over the next two weeks.

Maersk advised shippers Tuesday that it has “mapped out specific possible vessel-level contingencies that will be actioned depending on the duration of the labor dispute.” Maersk has not outlined specific diversions yet, but one of the vessels in its Asia–US East Coast TP16 service, the 8,540-TEU Seroja Lima, currently adrift outside the New York-New Jersey oirt, will now head to the Bahamas Port of Freeport, with an expected arrival of Oct. 8, according to the vessel’s latest schedule update from Maersk.

CMA CGM declared force majeure at the outset of the strike, which in many bills of lading allows carriers to discharge cargo wherever is most convenient.

If the strike continues, carriers will likely have to make new routing decisions by the end of the week, according to Sea-Intelligence Maritime Analysis. The backlog will equate to roughly 400,000 TEU, or 1.4% of global capacity, the loss of which would “push up freight rates, not just on the trades to the US, but likely across all major deep-sea trades,” Sea-Intelligence CEO Alan Murphy said in a report released Wednesday.

Source:

Angell, M. (2024b, October 2). Ships backing up outside of strike-shut US east, Gulf Ports. Journal of Commerce. https://www.joc.com/article/ships-backing-up-outside-of-strike-shut-us-east-gulf-ports-5741090

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Montreal port users not expecting quick intervention if strikes continue

The prospect of Canada Prime Minister Justin Trudeau stepping in to prevent Montreal port workers from launching more and wider strikes if they choose to do so after their 72-hour work stoppage ends Wednesday looks dismal.

Trudeau’s Liberal government is in an increasingly fragile alliance with a more leftist — and more pro-union — New Democratic Party. As Trudeau faced a second no-confidence motion in Parliament on Tuesday, the government urged Montreal port workers and their employers to return to the table and said it is monitoring the situation closely.

Knowing that Ottawa will not apply any significant pressure, Montreal port workers have seized on the timing of US East and Gulf coast longshore workers launching a strike Tuesday for the first time in nearly 50 years. Last week, the Canadian Union of Public Employees (CUPE) Local 375 announced that they would shut down the Viau and Maisonneuve container terminals, which account for approximately 40% of container capacity at Canada’s second-busiest port, starting the day before the International Longshoremen’s Association strike.

The union used a similar strategy in summer 2020, targeting specific marine terminals for three-day strikes before turning to other facilities, allowing — but significantly slowing — cargo flow. Those so-called rolling strikes lasted 12 days and were followed by five days of strikes in April 2021. The Trudeau government introduced back-to-work legislation to end the April 2021 strike.

The last few years haven’t shown any changes in Trudeau’s motivation to intercede. The federal government allowed a 13-day longshore strike at the ports of Vancouver and Prince Rupert in July 2023 before forcing a deal. More recently, Labor Minister Steven MacKinnon didn’t stop the country’s first nationwide strike involving both major railroads since 1987 until the 17th hour.

Notably, Parliament also hasn’t had the resolve to table back-to-work legislation, in part because the Conservatives, historically a stalwart for business, have become cozier with organized labor, according to three people familiar with the matter.

That has shipping executives who spoke to the Journal of Commerce pessimistic about an immediate government response to rising Montreal port worker agitation. CUPE and employers remain far apart on the same issues, namely salaries, wage guarantees and paid vacation in which workers aren’t on call, according to two sources close to the matter.

Details please refer to the JOC news.

Source:

Szakonyi, M. (2024, October 1). Montreal port users not expecting quick intervention if strikes continue. Journal of Commerce. https://www.joc.com/article/montreal-port-users-not-expecting-quick-intervention-if-strikes-continue-5740119

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ILA’s Daggett promises dockworkers ‘great contract’ as strike begins

ELIZABETH, NJ — The head of the International Longshoremen’s Association (ILA) in the early hours of Tuesday pledged he would secure a “great contract” that he would like to complete by the end of the month, just hours after hundreds of union dockworkers at US East and Gulf coast ports went on strike at midnight.

“Whether it’s one week, two — I’m hoping by three it’s over, I’m hoping — you are making history here,” ILA President Harold Daggett told the crowd, noting the significance of the union’s first strike since 1977. “We are going to walk away with a great contract.”

The ILA rebuffed a last-minute contract extension from maritime employers that aimed to head off the strike. Daggett has said previously the ILA would neither work past the expiration of the current contract nor extend it. The union said in a statement early Tuesday morning the United States Maritime Alliance’s (USMX) latest offer “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.”

The strike, which has forced the closure of all major container terminals from Maine to Texas, has scrambled the expected arrival during October of 62 container ships originally destined for ports along the East and Gulf coasts, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. The total capacity of those vessels is approximately 485,725 TEUs.

Ships are already planning to discharge cargo at non-affected ports. Hapag-Lloyd said Monday that vessels in its Caribbean Express Service that would have called the Port of Virginia this week now plan to call Canada’s Port of Saint John. In addition, the carrier’s South America East Coast Service is now preparing to call Mexico’s Port of Altamira instead of the US Gulf Coast ports it normally calls.

Details please refer to the JOC news.

Source:

Angell, M. (2024, October 1). Ila’s Daggett promises dockworkers “great contract” as Strike begins. Journal of Commerce. https://www.joc.com/article/ilas-daggett-promises-dockworkers-great-contract-as-strike-begins-5739618