Importers Write Biden to Increase Efforts to Stop Red Sea Terrorism and Write ILA & USMX to Negotiate & Prevent Strike
Importers are calling on President Biden, the International Longshoremen’s Association (ILA), and the United States Maritime Alliance (USMX) to end or prevent major disruptions to their supply chains.
With two separate letters on Tuesday, the American Apparel & Footwear Association (AAFA), which represents over 1,000 business brands, called on the president of the United States and the parties involved in the contentious contract negotiations at America’s East and Gulf Coast ports to address two separate but major issues for U.S. importers: Iran-backed Houthi terrorism preventing carriers from using the Suez Canal and another dockworkers strike shutting down U.S. ports.
The two problems are particularly impactful for businesses that import and export through East and Gulf Coast ports and utilize transatlantic shipping routes.
Letter to Biden Concerning Houthi Terrorism
For a year, Houthi terrorists have been attacking ships in the Red Sea and Gulf of Aden, forcing ocean carriers to send container ships of goods down and around Africa. Despite air raid attacks, the U.S. under the Biden/Harris Administration has been ineffective in stopping the attacks. The results have been heavy for shippers’ bottom lines. You don’t need me to tell you longer transit times and higher freight rates are bad for importers and exporters. And, of course, the damage goes beyond them to consumers and the economy as a whole.
The AAFA makes this argument to President Biden, as well as appealing to his administration’s climate change agenda, as it pleads with him “to significantly increase [the U.S. government’s] efforts to protect commercial shipping” in the AAFA’s letter to the president:
The cost of rerouting commercial goods around South Africa’s Cape of Good Hope has contributed greatly to inflation and high retail prices. Shipping costs have skyrocketed as the longer route adds two weeks and raises costs for personnel, fuel, insurance, and equipment. For each trip, an additional 900 tons of fuel worth approximately one million dollars is required, which, in turn, increases emissions for each ship by approximately 2,700 tons of CO2. The rising emissions contribute to global warming and hinder companies’ ability to meet sustainability goals. Equipment shortages occur as containers travel on ships for longer than expected. This contributes to further delays and backlogs which risks shortages of goods waiting to be shipped. The costs from rerouting cannot be endured any further and are harming the American economy, American workers, and American consumers.
Lame duck presidents like Biden are often considered little more than figureheads as they wait for the next administration to take over. However, uninhibited by electoral consequences to their actions, lame duck presidents sometimes act bolder than they normally would, and their actions can still wield incredible consequences. We may be seeing that play out right now, after President Biden’s approval of the Ukraine firing U.S. missiles into Russia on Tuesday resulted in Russia’s President Putin saying its regional war with Ukraine is escalating as it has “acquired elements of a global nature,” as reported in a Reuters article.
The AAFA is obviously hoping for decisive action from the Biden/Harris Administration to finally end the Houthi threat on ships in the Red Sea and Gulf of Aden to reopen use of Suez Canal and end the ongoing damage being done to global supply chains.
Letter to ILA & USMX Urging Contract Negotiations
The ILA halted contract negotiations with the USMX last week, significantly increasing the risk of another strike shutting down East and Gulf Coast ports. January 15th is the deadline to reach a new deal before dockworkers could go on strike and shut down the ports like they did for three days at the beginning of last month.
That disruption was a significant blow to importers like those represented by the AAFA, and another shutdown could be even more damaging. In their letter urging the ILA and USMX to return to the negotiating table and reach a strike-avoiding deal, the AAFA outlines the damage and risk East and Gulf Coast port shutdowns represent:
Three days’ worth of stoppages at the beginning of October caused significant disruptions and congestion that continue to linger at affected ports including Savannah, which is the second largest importer of apparel, footwear, and accessories on the East and Gulf coasts. We also saw two-year record high rail dwell times on the West Coast, which saw an increase in goods as shippers diverted away from the East and Gulf coast ports. If an agreement is not reached by the January 15 deadline, any strike would come at a critical time for shipping during the Lunar New Year. In fact, we are already seeing companies reroute upcoming shipments to the West Coast in preparation for a potential strike, which will cost the East and Gulf coast ports business both short and long term.
When the ILA cancelled negotiations in June, there was more time between that moment and the deadline to reach a deal than there is between this new cutting off of negotiations and the deadline for a new contract. With there not being enough time for a return to negotiations and a new deal the first time, shippers are extra worried there won’t be enough time for a new deal to be reached this time before the ports get shut down again.
The issue of automation is very contentious between the parties right now, but union jurisdiction will have to be dealt with and the issue of wage increases, which caused the first strike, could be revisited too.
After the full text of AAFA’s letters, I’ll include links to all the ILA strike and strike watch posts for anyone who wants to get into the background of this story.
Full Text of AAFA Letter to Biden
Here’s the full text of the AAFA’s letter to President Biden:
November 19, 2024
The Honorable Joseph R. Biden
President
The White House
1600 Pennsylvania Ave NW
Washington, DC 20500RE: A Year of Attacks on Commercial Shipping in the Red Sea
Dear President Biden,
It has been exactly one year since the Yemen-based Houthi terrorists violently seized a British-owned, Japanese-operated cargo ship named Galaxy Leader with 25 crew members from Bulgaria, Philippines, Romania, Ukraine, and Mexico, in flagrant violation of international law. Right now, Galaxy Leader with 25 crew members is being held hostage in the Red Sea, disgracefully being used by the Houthis, as a tourist attraction. Since that first attack, the Houthis have attacked more than 100 commercial ships in the Red Sea and successfully sank two vessels. Worst of all, the Houthis brutally murdered four sailors while attacking ships. This cannot continue.
We commend the efforts that have been taken by the United States military to protect commercial shipping. We applaud actions to work with allies, conduct offensive strikes that disable weapons, sanction economic ties, and bravely escort and rescue ships in these dangerous waters. However, these efforts have failed to curtail Houthi attacks on shipping. Instead, Houthi attacks have become more frequent, and more brazen. The Houthis benefit greatly and will earn an estimated two billion dollars in payments from carriers seeking safe passage. On behalf of the U.S. apparel, footwear, and accessories industry, we plead for the U.S. government to significantly increase its efforts to protect commercial shipping. The danger makes the Red Sea too high risk for commercial shipping and makes the Suez Canal unviable for carriers to transit. The Suez Canal is a critical route and accounts for 12-15% of global trade and 25-30% of global container traffic.
The cost of rerouting commercial goods around South Africa’s Cape of Good Hope has contributed greatly to inflation and high retail prices. Shipping costs have skyrocketed as the longer route adds two weeks and raises costs for personnel, fuel, insurance, and equipment. For each trip, an additional 900 tons of fuel worth approximately one million dollars is required, which, in turn, increases emissions for each ship by approximately 2,700 tons of CO2. The rising emissions contribute to global warming and hinder companies’ ability to meet sustainability goals. Equipment shortages occur as containers travel on ships for longer than expected. This contributes to further delays and backlogs which risks shortages of goods waiting to be shipped. The costs from rerouting cannot be endured any further and are harming the American economy, American workers, and American consumers.
As we reflect on the anniversary of the seizure of Galaxy Leader, and a full year of Houthi terrorism in the Red Sea, I urge you to dramatically expand the fight to uphold the fundamental right to freedom of navigation. We ask you to substantially increase your efforts using your diplomatic, military, and economic tools. Our industry, American workers, American consumers, and the American economy cannot wait any longer.
Thank you for your time and attention to this critical matter.
Sincerely,
Steve Lamar
President and CEO
American Apparel & Footwear Association (AAFA)
Full Text of AAFA Letter to ILA & USMX
Here’s the full text AAFA’s letter to the ILA and USMX:
November 19, 2024
President Harold J. Daggett Chairman and CEO David F. Adam
International Longshoremen’s Association (ILA) United States Maritime Alliance (USMX)
5000 West Side Avenue 125 Chubb Avenue, Suite 350NC
North Bergen, NJ 07047 Lyndhurst, NJ 07071RE: Finalize East and Gulf Coast Port Labor Contract
Dear ILA President Harold Dagget / USMX Chairman and CEO David Adam,
On behalf of the apparel, footwear, and accessories industry, we are urging you to return to the negotiating table and build on the resolutions you have reached to finalize an agreement before the expiration of the Master Contract on January 15. It is essential that both parties stay at the table. AAFA is the national trade association representing apparel, footwear and other sewn products companies and their suppliers, which compete in the global market. Representing more than 1,000 world famous brands, AAFA is the trusted public policy and political voice of the apparel and footwear industry, its management, and shareholders, its more than 3.2 million U.S. workers, and its contribution of more than $490 billion in annual U.S. retail sales.
Three days’ worth of stoppages at the beginning of October caused significant disruptions and congestion that continue to linger at affected ports including Savannah, which is the second largest importer of apparel, footwear, and accessories on the East and Gulf coasts. We also saw two-year record high rail dwell times on the West Coast, which saw an increase in goods as shippers diverted away from the East and Gulf coast ports. If an agreement is not reached by the January 15 deadline, any strike would come at a critical time for shipping during the Lunar New Year. In fact, we are already seeing companies reroute upcoming shipments to the West Coast in preparation for a potential strike, which will cost the East and Gulf coast ports business both short and long term.
Businesses are facing transportation challenges around the globe. This includes over a year of attacks on commercial shipping in the Red Sea that has caused shippers to reroute around the Cape of Good Hope, which has driven up costs and increased shortages, and which has had an outsized impact on the East and Gulf coast ports. This drives up prices and contributes to inflation. The economy cannot afford another significant disruption at the East and Gulf coast ports at this critical time.
You have many times demonstrated the power of cooperation among your great organizations, which are so vital to the rest of our country. We are depending upon you to reach across the table, before the January 15 deadline, to show us this cooperation yet again and remind us of the powerful things the ILA and the USMX can accomplish when you work together. Thank you again for all your energy and work towards reaching a new, fair, and sustainable contract.
Sincerely,
Steve Lamar
President and CEO
American Apparel & Footwear Association (AAFA)
ILA Strike & Strike Watch Posts
ILA Already Threatening Strike
ILA Stance Is Worse Than Just Threatening Strike
We Have to Talk About the ILA Strike Threat
How to Prepare for Potential ILA Port Disruption
No One Knows What Will Happen with ILA Port Disruption
Early Peak Season, High Freight Rates, & 5 Factors Shaping Ocean Freight Shipping 2024
ILA Strike Watch 2024: Cancelled Talks & Strike Threat Increase
Are There Any Signs the Early Peak Season Is Slowing Down?
ILA Strike Watch 2024 – US Trade Groups Ask Biden to Get ILA to Negotiation Table
ILA Strike Watch 2024: Biden No, Trump Yes?
ILA Strike Watch 2024: ILA Says Strike More Likely
ILA Strike Watch 2024: Union Rejects Wage Offer & Prepares to Strike
ILA Strike Watch 2024: With 1 Month Till Strike, ILA Flips on Mediation
ILA Strike Watch 2024: ILA Announces Unanimous Support for Strike
ILA Strike Watch 2024: Will White House Stop Strike?
ILA Strike Watch 2024: Biden Won’t Stop Strike
Shipper Alert – ILA Strike Is On!
ILA Strike – Biden Plays Union Politics Instead of Protecting U.S. Economy
ILA Strike – Secretary of Labor’s Unbelievable Statement About Negotiations
Shipper Alert – ILA Strike Ends!
ILA Strike Aftermath – It’s Not Over Yet & Wage Agreement May Become Problem
ILA Strike Watch 2025: ILA’s October Strike to Affect Global Supply Chains thru Mid-November
ILA Strike Watch 2025: ILA USMX to Resume Talks in November
Here We go Again – ILA Stops Contract Talks – ILA Strike Watch 2025
