How to Prepare for Potential ILA Port Disruption
The last post was about how nobody knows anything about what will happen with the International Longshoremen’s Association (ILA) contract negotiations, with its potential to highly disrupt shipping through East and Gulf Coast ports. I ended the post with a promise to make today’s blog about how shippers should prepare their imports and exports with the ILA situation in mind. Now, I keep that promise.
Some may ask, “If nobody knows anything about what will happen, how can shippers possibly plan?” People asking that were probably never in Boy Scouts. If you were, you know the Boy Scout motto: be prepared. That should also be the shipper’s motto.
As things in the future look more and more murky, businesspeople who import and export goods need to be more and more like good and loyal scouts. They must be prepared for whatever situation comes. and the good news about the potential ILA strike that the union’s president threatened is shippers actually know a very possible outcome before it happens.
So many disruptions to international shipping happen suddenly, with little to no warning: attacks in the Red Sea deterring use of the Suez Canal, a container ship hitting and collapsing the Francis Scott Key Bridge and shutting down the Port of Baltimore, a drought limiting ships traversing the Panama Canal, a devastating earthquake in Taiwan disrupting production, a tragic explosions in Tianjin disrupting one of China’s major ports, a megaship turning sideways and blocking the Suez Canal… Those were just the first ones to come to mind. The list could go on.
The point is having warning of a potential disruption is a luxury. Similarly, shippers had warning of potential port disruption at West Coast ports last year and successfully guarded themselves from port disruption caused by labor action during the International Longshore & Warehouse Union (ILWU) contract negotiations. Shippers prepared with strategies that were suggested right here in Universal Cargo’s blog. Should shippers use those same strategies now that a similar threat looms on the country’s opposite coast?
Let’s take a look at them…
Should Shippers Divert Goods from the East and Gulf Coasts to the West Coast?
Diverting goods from the West Coast to the East Coast was an effective strategy for avoiding disruptions that occurred from ILWU labor action. If the ILA does strike after their September 30th contract expiration, shippers who’ve already diverted their cargo to the West Coast will be very glad they did.
The whole point of the “Nobody knows anything” William Goldman quote is there’s no way to know if such a strike will happen. However, we’ve yet to see much progress to feel confident that a new contract will be reached by the time that date gets here. Whether shippers decide to divert or not, they should look into the option.
Knowing all the details for cargo diversion, including best estimated time, cost, routing, and necessary logistics partners for the time period starting in October will be crucial if the need to divert actually arises. Even doing a test shipment before then is not a bad idea.
Ideally, shippers shouldn’t have shipments scheduled to go through the East and Gulf Coast ports in early October, if they can avoid it, before having a better gauge on the likelihood of a strike.
That brings us to the next strategy…
Ship Early
The timing of the potential ILA strike is poor, to say the least. It’s right during international shipping’s peak season. Many importers have goods arriving for the Christmas shopping season as October hits. If you normally import heavily in October, try to move that up to July and August, which are also in the peak season range.
Ideally, businesses have already been analyzing adjustments to their peak season shipments with the possibility of ILA port disruption in mind. If you haven’t, it’s time to get on that. You could just plan on shipping as normal, but you’re taking on a large risk if you do so.
Consider Alternate Sourcing
It’s easy for a business to become complacent when it comes to sourcing. Most people do a majority of their shopping at the same stores. It’s easy and comfortable to shop in the same place. That doesn’t mean it’s the best option. Similarly, many businesses find a supplier or manufacturer and simply stick with it rather than consider alternates that may be superior.
Comfort and ease come into play with sourcing, and I don’t want to discount those things. Knowing your supplier or manufacturer has provided you with the products you need in the past makes you feel confident it will continue to do so in the future. And there’s something to be said about loyalty too. However, alternate sourcing may help avoid potential disruptions like the possible ILA strike while still providing equal or better quality goods.
Additionally, just because a business has always imported its goods doesn’t mean domestic sourcing is impossible either. It’s an option worth exploring along with sourcing from places that are more convenient for shipping through ports on different coasts or borders. Universal Cargo can help you with domestic shipping as well as your importing and exporting needs.
More Strategies…
The three ways shippers avoided disruption on the West Coast provide solid strategy for avoiding potential port disruption on the East Coast. However, I don’t want to merely rehash those already covered strategies, so here are a few more things to help, not only the ILA situation but any international shipping disruptive events…
Early Planning and Communication
The earlier you plan and communicate options for potential disruptions, the better your business will be at handling unfortunate situations for importing and exporting. Shippers should actively engage with suppliers, partners, and customers. Through this communication and engagement, shippers can put up-to-date continuity plans in place. Efficient communication systems are essential to be flexible and adaptable during difficult moments in the already volatile world of international shipping.
With continuity comes contingency. Or maybe it’s really the other way around. Always seek and prepare contingency options that have been shared with key team members and partners. Perhaps they come from those key team members and partners. They are what will have you prepared when the really unexpected disruptions happen.
Stay Informed and Monitor Shipping News
You’re reading Universal Cargo’s blog, so you likely already do this. But it’s worth reiterating that knowledge can make all the difference. We’re keeping an eye on the ILA negotiation situation and writing about it in this blog. We also talk about other issues and news items that affect shippers.
Other places to look to stay informed on what’s happening in international shipping include the Journal of Commerce (JOC), FreightWaves, TheLoadstar, and Hellenic Shipping News, to name a handful.
Specifically with ILA negotiations, you can watch announcements made by the ILA and United States Maritime Alliance (USMX) on social media and their websites.
In particular, watch for dates like the September 30th contract expiration or the May 17th deadline ILA President Harold Daggett gave for local negotiations.
Advocacy and Engagement
There are ways shippers can actually take action or lend support to the quick resolution of disruptive contract conflicts between dockworker unions and employers at the ports.
Shippers can collaborate with industry associations that advocate for timely contract agreements and stability at the ports. Such organizations include the National Retail Federation (NRF) and the American Apparel & Footwear Association (AAFA). And there are many more.
I’ve covered letters to U.S. presidents and politicians that have come from such organizations – often the combination of many such organizations. Adding your business to these shows politicians more voter support behind taking action to protect movement through the ports. Currently, politicians on both sides of the aisle have been working on changing laws in order to benefit shippers and supply chains to protect the U.S. economy. There may not be a better time to advocate for the protection of supply chains to local and federal politicians.
Shot List and Storyboard Approach
Since this basically two-part blog series started with a film industry quote, let’s end it by coming back to a film-anology strategy.
- Shot List: Create a detailed shot list for your shipping operations. In film, a shot list breaks down each scene into each individual shot the crew must execute and capture on camera to be edited together to tell the story for the audience. A shipping shot list will break down each part of your supply chain into the individual tasks that must be accomplished to get goods all the way from their sourcing to your business and then your customers. This shot list should include specifics such as the type of cargo, handling requirements, and any special considerations (e.g., hazardous materials).
- Storyboard: Think of the shipping process as a storyboard. Visualize each step, from loading at the origin to unloading at the destination. Consider potential bottlenecks, delays, and alternative routes. Figure out the story of the journey of your goods as well as alternate routes and paths your goods could take in order for you to storyboard a better story for your business.
Conclusion
We don’t know what will happen with the ILA contract negotiations, but shippers can be ready for any disruptions that may come from it. Taking the time to plan and prepare is key. Of course, if you have good shipping partners, they may be able to help do a lot of this planning and preparing for you.
