Port Strike Ends, Negotiations Continue

October 4, 2024

Port Strike Ends, Negotiations Continue

The International Longshoremen’s Association (ILA) agreed yesterday to a pay increase of 62 percent, ending a three-day strike that halted operations as U.S. East and Gulf coast ports. It is important to consider that this is a tentative agreement, according to the Washington Post, which will extend the current contract until January 15, 2025, during which time negotiators will bargain over remaining issues. Those include addressing how automation will affect union jobs.

While a large coalition of industry groups, including PRINTING United Alliance, urged the Biden Administration to take action to halt the labor action, it was the negation between ILA and the United States Maritime Alliance that brought port workers back to the job.

That said, all is not yet normal. CNN reports logistics experts saying that for the movement of goods to return to normal, it could take 3-5 days for each day of the strike (9-15 days).

October 1, 2024

Port Strike Begins

As expected, or perhaps feared, a port strike affecting U.S. ports on the East and Gulf coasts began today. While the duration of the strike is unknown, what is known is that this labor action could have profound effects on supply chains, including those for the printing industry. This is a developing story.

The demands of port workers, though their labor union, the International Longshoreman’s Association, include a reported 70% increase in wages, as well as job protection as a rising tide of automation begins to affect port jobs.

According to the Washington Post, the U.S. Maritime Alliance, which represents port companies, said negotiators traded proposals in the final hours leading up to the October 1 strike date, and that it was offering 50% raises.

A National Public Radio report said that despite pressure from more than 170 industry groups (including PRINTING United Alliance) warning of the potential for strong negative impacts on the U.S. economy, the Biden administration is committed to letting collective bargaining run its course, as opposed to intervening. That letter, according to CNN, stated, “The last thing the supply chain, companies, and employees … need is a strike or an ongoing labor negotiation.

About the strike, Stephanie Buka, government affairs coordinator at PRINTING United Alliance, said, “PRINTING United Alliance joined a coalition letter, along with 226 like-minded organizations, urging President Biden to use the authority of his office to bring an end to the strike at U.S. East and Gulf Coast ports. We are hopeful that the parties will return to the table and come to an agreement to ensure a reliable, efficient supply chain for the printing industry and many other industries.”

A Counselor PromoGram released today by ASI said that by one estimate, the strike will cost the U.S. economy $540 million per day. That report also quoted Jing Rong, vice president of supply chain and sustainability at Counselor Top 40 supplier HPG. Rong said, “Anything less than two weeks should not cause a pricing change, but if it continues longer, we’ll have a bigger issue on our hands.” That bigger issue could include price spikes such as those witnessed during COVID-19, when container and vessel shortages suppressed inventories.

As stated in an earlier Wide-format Impressions article, when the current strike was a looming possibility, potential strategies for navigating supply chain issues can include working with domestic manufacturers of products needed, or seeking relationships with suppliers or manufacturers less vulnerable to U.S. port shutdowns. Also, increasing inventory now in hopes it will bridge and any disruption is an option, though that includes a higher outlay during a time when materials costs are rising.

September 25, 2024

U.S. Port Strike Looms: Implications for Wide-Format Segment

With the threat of a widespread port strike looming in the U.S., concerns are rising across multiple industries, including printing. If a strike occurs, businesses in wide-format and other print sectors could face significant challenges in the delivery of equipment and consumables entering the country through either East Coast or Gulf Coast ports. While a strike is not a certainty, wide-format producers should prepare for its potential.

An article in the New York Times states that part of the dispute between port authorities and thousands of union laborers stems from the efforts of ports to automate some job functions. It is the goal of the International Longshoremen’s Association to protect existing jobs.

According to Stephanie Buka, government affairs coordinator for PRINTING United Alliance, “If East and Gulf Coast port workers strike on Oct. 1 as expected, the supply chain that the printing industry relies on will be thrown into disarray. The disruption could cause a real headache for the apparel community, since the majority of imported apparel comes through East Coast ports. It would also affect imports of aluminum lithographic printing plates, industrial printing machines, and other printed products. The significant backlogs, delays, and congestion will lead to increased costs for businesses and consumers.

PRINTING United Alliance recently joined a coalition letter addressed to the Biden administration, imploring it to help forge a deal between the International Longshoremen's Association (ILA) and the United States Maritime Alliance. We will hope for the best, but recognize that print service providers may need to activate contingency plans.”

The lead sponsor of the coalition letter mentioned by Buka is Americans for Free Trade. As of September 26, 68 organizations have stepped forward to become signatories.

One industry-focused manufacturer, Ultraflex, released a customer advisory about the potential disruptions resulting from a strike. In its advisory, the company stated the following, “East and Gulf Coast ports handle approximately 43% of U.S. imports. A one-day strike could take five days to clear, while a week-long strike could lead to congestion lasting until mid-November. Recovery from significant disruptions could take 3-6 months, depending on the severity.”

According to an article in The Economist, just the potential of a strike is already changing behavior. It said importers, in an effort to stave off the effects of a long-term disruption, are rushing to clear containers already in port.

And the disruption of a strike would affect more than consumables – it would also affect delivery of equipment. According to Erik Norman, president at wide-format equipment manufacturer swissQprint America, “A port strike will have significantly negative impact on our business as well as our clients. Many customers are now seeking to have installations before the year end to take advantage of Section 179 tax credits, and delays may cause them to lose this opportunity. Airfreight is an option; however, that is a very high-cost burden on both us and our clients. The bottom line is that any port strike will have large financial and customer satisfaction burden on our business. “

A Matter of Timing

While there is never a good time for supply chain disruption, the wide-format segment, and other industries, are gearing up for year-end/holiday promotional campaigns. Slowdowns in the delivery of materials – and even equipment – would compress the time available between the present and the hard deadline of holiday season promotions. Scarcity of materials will drive up costs of available supplies, thus increasing production costs and affecting margins.

While the reality of a strike is not certain, its threat is enough to shake up supply chains. According to The Economist article, port backups are currently causing significant delays, resulting in materials being stuck in transit, and logistics companies challenged to move goods as needed. The Financial Times reported that industries are adopting mitigation plans to address increased freight costs – which would rise if the strike threat becomes a strike reality, or if port slowdowns worsen.

Being Prepared

Potential strategies for navigating supply chain issues will be very familiar to business owners and managers that struggled with supply chain issues after the 2020 COVID-10 pandemic. These include working with domestic manufacturers of products needed, or seeking relationships with suppliers less vulnerable to U.S. port shutdowns. Also, increasing inventory now in hopes it will bridge and disruption is an option, though that includes a higher outlay during a time when materials costs are rising.