Thursday, December 20, 2012

Watch for U.S. East Coast/Gulf strike

I have thought for some time the ILA will strike, but hesitated to say so.

As I have mentioned before, the ILA is totally out of touch with reality.  They do not want to
"give in" to computerization, efficiencies, etc., because this would mean less jobs for their

They also do not want to give  up "royalty payments", which came about after shipping changed
from break bulk to containers.   How long ago was that?  I doubt many people reading this
ever remember a time of  before containers.

Having said this, the ILA also does not realize that the carriers would probably not be hurt
all that much from a strike.  Sure, some of the smaller ones might, but the big carriers will
find other ways to get the cargo to the customers, and, because it will be due to your strike,
they will pass the costs on to the customers.

With the U.S. economy being slow, it's not going to impact things so much.  Freight rates
have been so incredibly low the last few years paying some additional money to get cargo
won't be a huge hardship.

For the carriers, it might give them a chance to negotiate the new rates at a higher level.

So, what I think will happen is the ILA will go on strike.  They will be out maybe 2 weeks,
they will be ordered back to work by the government, and this will continue for some time.

The rail roads have capacity to move containers from the West Coast to the East Coast,
and it will take a little time to get things organized, but because U.S. Customs allows
clearance electronically (hello- wake up ILA), it's not so difficult to divert cargo as it
was say even 5 years ago.

In a couple of weeks we will see if my guess is right or wrong.

Catch ya then.


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