Strike Closes Ports, Shippers Concerned Over Labor Tactics

U.S. importers are concerned a two-day strike at the East Coast's largest ocean freight terminals is a harbinger of growing militancy following 30 years of labor peace along the region's docks.

The Sept 28-29 shutdown of the Port of New York-New Jersey by the International Longshoremen's Association halted an estimated 10,000 to 11,000 truck moves and caught the attention of the nation's largest retailers at the busiest time of their year.

In the past, historically problematic West Coast labor relations pushed many shippers to diversify supply chains, bringing more goods east, but ILA changes and an increase in labor unrest threaten to upset their systems once again. "We are definitely monitoring [labor relations] more closely now so that we will have options in case of a shutdown," said Goya Foods' Matthew Montour. "Over the past years it hasn't even been an issue, so we haven't had to consider an option."

Many believe the shutdown is a sign of changes to come this summer when the ILA holds its quadrennial convention and potentially elects a new president who is regarded as more confrontational. This is expected to coincide with the start of the union's negotiations of a new East and Gulf Coast contract for 2012.

If the recent unrest proves symptomatic of a deeper trend, shippers may be forced to reconsider their bicoastal strategies and overall global supply chain planning. In this week's Cover Story, The Journal of Commerce examines the growing concerns of shippers, carriers and port operators in the face of a changing ILA.