The potential ILA strike of approximately 14,500 dockworkers at U.S. East and Gulf ports is a week away. At the threat of an event that would cause major disruptions to the supply chain in the U.S. and cost our nation’s economy a billion dollars a day, there are questions to be asked.
What is the status of the negotiations between the ILA and USMX? Does the strike seem likely?
With the February 6th deadline of reaching an agreement drawing so close, the media is suspiciously quiet when it comes to news about the negotiations. Maybe it is a simple problem of a lack of news to report on the subject.
The ILA and USMX have been quite tight-lipped about the negotiations of late. So too, has been the Federal Mediation and Conciliation Service (FMCS).
The last real update released by any of the parties involved was on January 17th from FMCS stating, “The United States Maritime Alliance and the International Longshoremen’s Association conducted negotiations during the three day period January 15-17, 2013. In these negotiations the parties made progress and have agreed that the negotiations will continue under our auspices.”
USMX shared the FMCS announcement on their Labor Updates Page the same day with nothing more to add.
Certainly, you can’t blame the parties for not commenting “due to the sensitivity of these negotiations” as FMCS Director George H. Cohen put it in that January 17th news release. However, the silence does leave everyone waiting and wondering how things are going.
During this long, dragged out negotiation period, talks between ILA and USMX have had a tendency to break down and end abruptly. When that happened in December, the strike looked eminent. There were no plans to meet before the then strike date of December 30th; but at nearly the last minute, ILA and USMX agreed to extend the master contract to February 6th so negotiations could continue before a strike shut down ports.
As the February 6th date is now approaching, the sense of urgency, perhaps even of panic, from retailers and businesses that directly depend on the East and Gulf Coast ports that was present last time does not seem to be present. Still, it is not as though no one is preparing for the possibility of a strike. Many retailers have increased their inventory in case the supply chain is disrupted.
The impact of a potential strike has already been seen in economic data, according to shipping experts. The latest January 2013 import volumes showed a projected 2.3 percent increase over the same period in 2012. Experts say the increase is a sign retailers are concerned about the outcome of the negotiations, so they're increasing inventory to prepare for a shutdown of nearly half of the country's major ports.
Still, there is a difference in the tone of retailers preparing for the possibility of a strike and the urgent letters to President Obama urging him to prevent a strike that were sent as the planned December strike date approached.
It could be that after months of strike threats, we’ve grown numb to the idea of a strike. Maybe because the strike has already been postponed a couple times, we expect that to happen again if a contract resolution is not reached. Possibly, the potential strike has become old news so reporting on it has gone down, putting it less on people’s minds.
Ultimately, I think the real change as we approach the proposed strike date is that we have satisfactory—even if not totally complete—answers to the questions of the status of negotiations and the likelihood of a strike.
The latest updates that have been made on negotiations have been positive and while we’ve tried to remain optimistic about the situation no matter how dire it looked here at Universal Cargo Management (although always preparing to take care of your import and export needs even in the worst case scenario), we have reason to believe the strike is not likely to happen.