Recommended Contingency Plans Based on East Coast Contract Talks

January 3, 2013
By Michelle Kelley

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Client Alert

You could practically hear the country’s collective sigh of relief over last week’s announcement that both parties in the East Coast labor talks agreed to extend their contract beyond the December 30 deadline.

At the same time, it was also revealed that labor and management tentatively agreed on how to handle container royalty payments, which reimburse union members for work lost due to modern machinery upgrades. However, neither side is willing to divulge the details of how royalties will be doled out until the master contract has been approved.

Outstanding isssues

Next on the negotiating table are issues surrounding work rules, such as the minimum number of relief staff to be hired, minimum number of work hours, and start times.

Gauging the threat of a strike/lockout

Though both sides are closer than ever to securing a final master collective agreement, the threat of a strike or lockout remains uncomfortably real‒especially on or around February 6, when the current contract extension expires.

Contingency planning

The most cost effective option is to avoid booking cargo that will arrive at the ports of New York/New Jersey from February 6-16. The possibility of port closure due to a strike or lockout will be highest at this time.

If that doesn’t work for you, then there is always the more costly alternative to route cargo via the U.S. West Coast or Canada. It should be noted that many other shippers will be making similar plans, which may all but clog these ports.

Keep in mind that in the event of a lockout or strike, carriers will implement a congestion surcharge of $1000 per 40′ for all ports.