Preparing for Potential Disruptions: Upcoming Labor Challenges, AWA’s Preparation and Freyt World’s Support

Freyt World has been making waves as a fast-growing Global Logistics Network. With just a year under our belt, we’re proud to have 125 member companies across 91 countries and 161 cities, operating from 220 offices—and our network is expanding every day. What sets our community apart is not just our expertise in logistics but the shared journey of achievements that binds us across the globe.

A key factor in our growth and success is the strong sense of camaraderie and the network-building initiatives championed by both the Freyt Team and our members. We actively encourage our members to communicate, coordinate, and collaborate in each other’s growth and achievements. This week, Graham Burford, CEO of American Worldwide Agencies (AWA), shared valuable insights on the upcoming labor challenges they anticipate encountering.

Graham shares:

As we approach the end of 2024, we are preparing for a busy period marked by several challenges that present opportunities for AWA/ISCM to deliver exceptional value and maximize our offerings to clients.

Upcoming Labor Challenges 

The International Longshoremen's Association (ILA), representing dockworkers on the U.S. East and Gulf Coasts, faces a potential labor dispute with the United States Maritime Alliance (USMX). The labor contract expires September 30, 2024; without a new deal, a strike may start October 1. Upcoming U.S. elections increase chances. Key issues include demands for substantial wage increases and disputes over terminal automation, with the ILA pushing for raises that may exceed the 32% increase achieved by the West Coast International Longshore and Warehouse Union (ILWU) last year. In addition to this ILA challenges we have the Canadian railway strike involving the Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) has come to an end. Canada's government used binding arbitration to resolve a labor dispute, but it remains unsettled. An Air Canada pilots' strike looms.

An ILA strike would have a widespread impact, disrupting supply chains across multiple sectors such as retail, automotive, and agriculture. It would delays, economic losses, shortages of consumer goods, and production halts. With limited options for rerouting cargo to alternative ports due to capacity constraints, the potential strike poses significant challenges to all stakeholders.

What This Means for AWA and Our Clients

Ocean Freight 

The capacity to reroute vessels to the West Coast or alternate ports is highly constrained. Carriers are already imposing strike-related surcharges, with fees up to $800 per TEU for cargo rerouted to the West Coast, alongside potential congestion and storage charges for delayed cargo.

We mitigate these risks through our Consolidation Program for Less than Container Load (LCL) cargo to Australia, New Zealand, the Pacific Islands, and Hawaii, centered around our Los Angeles gateway. Utilizing our independent domestic rail IPI program, with dedicated terminals and a non-reliant international IPI structure provides significant stopgaps and redundancy to keep cargo moving through these challenges. Additionally, we have allocations to meet client needs for LCL cargo inside of our robust LCL programs. For Full Container Load (FCL), while options are limited, we have proactively worked with clients and partners to move cargo ahead of these potential disruptions, ensuring all are well-positioned.

Air Freight

Our dedicated offices across the USA have strong allocations and Block Space Agreements (BSAs) on routes to the Pacific region are ready to respond if the strike extends over a longer period. We have already observed a significant demand for air capacity and have secured options and arranged charter capacity for clients needs in late September and early October to ensure continuity in supply chains.

Market Trends and Capacity Considerations

Given the current capacity crunch, we are observing expected trends of surcharges, storage fees, and rate increases across all transport modes. Holiday peaks and new product launches (e.g., Apple's upcoming releases) compound these pressures, driving up rates leading into the busy season.

We will navigate these challenges with our clients, providing timely updates and strategic solutions to ensure minimal disruption from upcoming labor issues.

Freyt World as a Global Logistics Network

At Freyt World, we believe that building a successful network is all about encouraging positive relationships and maintaining open lines of communication. When our members support one another and develop a culture of mutual assistance, everyone benefits. This collaborative spirit fuels individual growth and advances our entire network, ensuring ongoing success for everyone involved.