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US East Coast wholesaler on port standoff: ‘This strike is going to really wreak havoc’: UnderCurrentNews

Amanda Buckle: UnderCurrent News

Seafood importers are holding their collective breaths now that the long-threatened port strike on the US East and Gulf coasts has begun.

The US imports as much as 260,000 metric tons of seafood worth $21.1 billion monthly, much of it arriving in the more than 14 ports along the coast that were shut down on Monday (Oct. 1).

Contracts covering 45,000 dockworkers expired at midnight Monday (Sept. 30) when the International Longshoremen’s Association (ILA), the largest union of maritime workers in North America, and the United States Maritime Alliance (USMX), an organization representing employers of the East and Gulf coasts longshore industry, failed to agree on a new master contract.

The closures include such large seafood import ports as Boston, Massachusetts, Houston, Texas, and Miami, Florida.

“This strike is going to really wreak havoc,” one US East Coast wholesaler who imports a number of the most impacted seafood products told Undercurrent News on Monday.

He said his company will feel the effects of the strike almost immediately when frozen Chilean salmon shipments are held up.

“We’ve got half a dozen loads on the water, and some of it is already pre-sold,” he said. “I would say it’s going to affect a few other items that are already on the water coming into Miami (Florida), Jacksonville (Florida) and Hampton Roads (Virginia). These items will just sit on the boats until they get offloaded.”

The US imported 39,583t of farmed salmon in July, many of the shipments landing in US East Coast ports. Chile is the US’ largest source of salmon, sending it 16,620t (42% of all salmon imports) worth $212.3 million in July, while Norway — the US’ third-largest source of salmon — sent it 5,524t worth $82.9m.

But Jim Gulkin, group managing director for Siam Canadian, told Undercurrent that while all frozen species that are shipped via sea freight will be affected, shrimp from Asia and South America will be the most impacted items.

“It’s very concerning — coming right up to holiday cargo delivery time,” said Gulkin. “If it doesn’t get cleared up quickly, it’s going to be a huge problem for processors, importers, retailers etc.”

India is the largest source of shrimp for the US, sending it 26,729t worth $200.5m in July, while Ecuador is the second largest, sending it 21,913t worth $89.2m that month. In total, the US imported 61,213t of shrimp worth $481.8m in July.

Deteriorating value may not necessarily be an issue if a vessel is properly monitoring the temperatures of the containers, the US East Coast wholesaler, who requested anonymity, said. But importers will not be able to offload product — and therefore won’t be getting paid for it — until ILA workers have a contract in place.

While many importers will seek to bring seafood into the US into other ports not impacted by the strike, like those on the West Coast, the backups will be bad, and containers will be hard to come by, he warned.

On the bright side, the wholesaler noted that he dealt in a lot of lobster and snow crab that comes into the US on trucks, so those shipments won’t likely be in danger.

Out of time

 
This is the first strike by ILA at ports along the East and Gulf coasts since 1977. The most recent agreement that expired on Monday was last negotiated in 2018.

Just like this year, the contract in 2018 expired on Sept. 30. At the time, USMX and ILA were able to come to an agreement and sign a new six-year agreement on Sept. 25, 2018, averting a strike by five days. That was not the case this year.

USMX said in its most recent update late Monday evening that it increased its offer to ILA and also requested an extension of the current master contract.

“Our offer would increase wages by nearly 50%, triple employer contributions to
employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation,” USMX explained of its counter offer to ILA.

While USMX’s offer is a nearly 50% pay raise over six years, ILA’s request is for a 77% pay raise over six years. Union president Harold Daggett said that his group’s request is based on inflation and years of minimal increases. For context, ILA members reportedly earn a base salary of about $81,000 annually, with the opportunity for overtime bringing some to $200,000.

While the union did not issue an update or response to USMX’s counter offer, ILA said in a statement Monday morning (Sept. 30) its workers deserved to be properly compensated.

“ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing,” said the union. “It’s disgraceful that most of these foreign-owned shipping companies are engaged in a ‘Make and Take’ operation: They want to make their billion-dollar profits at United States ports, and off the backs of American ILA longshore workers, and take those earnings out of this country and into the pockets of foreign conglomerates. Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages.”

Uncertain future

USMX filed an Unfair Labor Practice charge with the National Labor Relations Board (NLRB) on Monday and requested immediate injunctive relief, which would require ILA to resume bargaining.

NLRB will only confirm that it is investigating a charge that was filed by USMX against the ILA. Meanwhile, the White House said in a statement early Tuesday morning that, “president Biden and vice president Harris are closely monitoring the strike at East Coast and Gulf Coast ports.”

For some industry organizations impacted by the port strike, that’s not enough. The National Association of Manufacturers (NAM) released a statement calling on president Biden to intervene by invoking the Taft-Hartley Act.

The law was passed in the late 1940s to end a number of strikes that were started across the steel, oil refining and meatpacking industries. In simple terms, it can prohibit striking during a period of national emergency.

“There will be dire economic consequences on the manufacturing supply chain if a strike occurs for even a brief period,” said NAM president and CEO Jay Timmons. “NAM estimates show a strike at the East and Gulf Coast ports would jeopardize $2.1 billion in trade daily, and the total economic damage could reduce GDP by as much as $5 billion per day.”

US Chamber of Commerce CEO and president Suzanne P. Clark also wrote a letter to the president to urge him to invoke the Taft-Hartley Act.

“Americans experienced the pain of delays and shortages of goods during the pandemic-era supply chain backlogs in 2021,” wrote Clark. “It would be unconscionable to allow a contract dispute to inflict such a shock to our economy. These ports collectively handle more than 68% of all containerized exports and 56% of imports for the nation, with a daily trade value exceeding $2.1 billion. They are also critical to many small businesses including trucking, restaurants, and others that rely on these ports for their livelihood. Simply put, you have the authority to keep contract negotiations going while keeping the ports open.”

Gavin Gibbons, chief strategy officer at the National Fisheries Institute (NFI), told Undercurrent that “NFI believes the Administration should do everything in its power to encourage a speedy solution to this impasse.”

He added: “The strike has the potential to impact just about every part of the seafood value chain and exacerbate food inflation at a time when Americans can least afford it.

It’s not just TVs and toys that are held up at the ports. It’s food. Seafood imports and exports. We are providing our members with guidance and resources and will continue to work closely with Americans for Free Trade to ensure policymakers get the message that this is serious on a number of levels.”

As Undercurrent previously reported, NFI earlier joined 177 industry associations in asking the Biden administration to intervene and help prevent a strike.

As Gibbons noted, it’s not just seafood being held up. The import of numerous other perishables are threatened, too — like bananas, of which the affected ports handled 3.8m metric tons last year (a whopping 75% of the nation’s supply). Then there are other important items, like wine, of which 70% is imported through the shuttered ports.

Not the only port strike

To add to the US East Coast port strike chaos, dockworkers in Montreal, Quebec, at Canada’s second-largest port, began their own strike on Monday. Port Montreal confirmed on Sept. 30 that, in line with the strike notice filed by the Longshoremen’s Union – CUPE Local 375, a partial strike affecting the Viau and Maisonneuve terminals began that morning. The two temporarily shuttered terminals handle more than 40% of the container traffic at the port.

Frank Kenney, director of industry solutions at Cleo, an end-to-end supply chain integration software company, told Inside Logistics that, as a result of the US port strike, traffic through the Port of Halifax, in Nova Scotia, and the Port of Montreal is likely to increase due to their proximity to rail carriers. 

The issue with Halifax is that moving goods is slightly more challenging in that it involves rail transportation through the Midwest and Chicago is a major hub.

“Berthing at Port Newark in New York offers easier access to east coast highways and rail systems, but Chicago lies 960 miles to the west, adding at least a day to move freight from there to key hubs in the east,” Kenney explained.

Fortunately for those with containers at Port Montreal, the partial strike is expected to cease Thursday (Oct. 3) at 6:59 a.m.

Siam Canadian Group Frozen Seafood Exporters 
Email: info@siamcanadian.com

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