The negotiations for a new International Longhshoremen's Association contract covering dockworkers at the East and Gulf Coasts ports broke down Wednesday morning. The collapse in contract discussions has prompted shippers to step up contingency plans that many already have implemented as the current expiration date of September 30 approaches. Some of those plans include accelerating shipments or diverting cargo to the West Coast, Canada or Mexico.

Committees representing the ILA and United States Maritime Alliance met Wednesday morning anticipating a three day conference of contract talks. However, negotiations broke off after 20 minutes of discussion due to management's negotiations on productivity and efficiency improvements, specifically in the Port of New York and New Jersey. James Capo, USMX Chairman/CEO, stated that the Port of New York and New Jersey has become "the most expensive in the world." Supplementary local and regional contracts have also been postponed. According to ILA spokesman James McNamara, President Harold Daggett of the ILA stopped negotiations after USMX presented an "ultimatum" as a proposal and would not discuss any contract details unless the ILA agreed not to require employers to "pay for inefficiencies." Capo has reported that USMX is disappointed with ILA's "uncompromising stand." As a result of the halted discussions President Daggett of ILA stated that the ILA's 200 member union will most likely reject the USMX's proposal and respond by going on strike. The ILA hasn't had a coastwide strike since 1977.

Liberty recommends that U.S. ocean importers review their current shipments and future forecasts to understand where freight currently is in transit to identify potential risks.

Liberty will continue to monitor the situation closely and provide updates as they become available. For more information regarding this matter, please contact your Liberty account representative.