US Ports prepare for Major Strike

SHIPPING NEWS

East Coast Ports Prepare for Major Strike

The ports on the East and Gulf Coasts of the US are on the verge of a significant disruption as dockworkers represented by the International Longshoremen’s Association (ILA) threaten to strike on October 1, 2024. The conflict centers on unresolved labor negotiations between the ILA and the US Maritime Alliance (USMX), which represents employers. The union is seeking substantial wage increases and firm commitments against port automation, which they argue could threaten jobs. The ILA has pointed out that wage growth for its members has not kept up with inflation, while ocean carriers have experienced significant profit increases.

Despite the gravity of the situation, the Biden administration has stated that it will not invoke the Taft-Hartley Act to prevent the strike. This decision has stirred concerns in various industries, as a strike at these key ports could lead to widespread supply chain disruptions. The East and Gulf Coast ports manage a substantial share of US container traffic, and any prolonged shutdown would have ripple effects across global trade. Imports at these ports have surged recently, with a 12.9% year-over-year increase recorded in August 2024.

Businesses are already responding to the impending strike by diverting shipments to West Coast ports. Southern California’s ports have seen a spike in activity as companies try to mitigate the risks of East and Gulf Coast disruptions.

However, these diversions may not fully shield supply chains from disruption, as West Coast ports can only handle so much additional capacity. The industry is urging both the ILA and USMX to return to negotiations and reach an agreement to prevent a damaging shutdown. Watch clip

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DSV Clinches Deal to Acquire DB Schenker

DSV has finalized a deal to acquire DB Schenker from Deutsche Bahn for €14.3 billion ($15.8 billion), ending a much-anticipated competition dubbed "the logistics sale of the century." DSV's CEO Jens H. Lund emphasized that this acquisition will create a world-leading transport and logistics powerhouse, benefiting employees, customers, and shareholders alike. By integrating DB Schenker’s expertise, DSV will strengthen its divisions in Air & Sea, Road, and Solutions, offering higher service levels and innovative solutions.

The acquisition faced stiff competition from a CVC-led consortium, which received strong support from Germany's largest worker union, Ver.di, as they promised fewer job losses. While Ver.di estimated 5,300 jobs would be cut under DSV’s ownership, DSV has committed to keeping job cuts to between 1,600 and 1,900. DSV will also honor employment agreements for German workers, keeping conditions intact for two years after the acquisition.

DB Schenker’s sale is the largest transaction in Deutsche Bahn’s history. Richard Lutz, CEO of Deutsche Bahn, expressed confidence in DSV as a strong partner for Schenker and a stable long-term home for the company's employees. The deal is subject to approvals from Deutsche Bahn’s Supervisory Board and the German Federal Ministry for Digital and Transport, which are expected soon.

This acquisition is a pivotal moment in the logistics industry and is expected to enhance DSV’s global competitiveness and flexibility for its customers' supply chains.

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