MARKET BRIEF | October 2024
ILA Continues Fight on Automation
Even though the International Longshoremen’s Association (ILA) agreed to go back to work, ending their strike and extending the negotiation window with the U.S. Maritime Alliance (USMX) until January 15, they have vowed to continue their resistance to port automation. As collective bargaining continues, this will be the primary topic on the table, as the two parties have tentatively agreed to a deal on wages. The reliance on automation in U.S. ports, compared to international ports, shows a stark contrast. International ports lead in automation adoption, while U.S. ports lag behind. Most American ports rely on semi-automated systems or traditional manual labor for handling containers, with only a few partially automated terminals, such as at the Ports of Long Beach and Los Angeles. In many international ports, especially in places like Europe, labor unions have been more open to automation, where they have negotiated agreements that secure jobs or offer compensation packages for workers displaced by automation.
Impact of Southeastern Hurricanes
The impact of Hurricanes Helene and Milton on ports and supply chains has been significant, though some recovery efforts are underway. Following Helene, supply chains in the Southeastern U.S. saw widespread disruptions, particularly in essential goods like petroleum, steel, and IV fluids. Helene caused flooding that damaged critical infrastructure, including a key Baxter International facility in North Carolina, which led to shortages in IV fluids across the country. The facility has resumed shipments, though supply constraints remain. In terms of ports, Milton compounded the problems when hitting Florida’s Gulf Coast, specifically Port Tampa Bay, which is a critical hub for goods like petroleum, food, and industrial products. The closure of major ports has had ripple effects, further slowing the movement of imports and exports across the U.S. Some supply chain routes are now prioritizing recovery, but the downstream effects are expected to last for weeks. Both hurricanes have left a challenging environment for logistics, and recovery is ongoing.
Port of Montreal Workers on Partial Strike
Longshore workers at the Port of Montreal have escalated their strike by halting all overtime work. This action was initiated by the Canadian Union of Public Employees (CUPE Local 375), which represents nearly 1,200 dockworkers, and is a pressure tactic amidst ongoing contract negotiations. The key issues in the talks include scheduling conflicts and reduced use of senior forepersons. The Maritime Employers Association (MEA) has warned that this refusal to work overtime could significantly disrupt port operations, potentially leading to delays in freight movement. This comes on the heels of a three-day strike in late September at two major terminals, which handle a substantial portion of the port’s container traffic. Shipping companies are already anticipating delays and are considering additional surcharges to account for the disruptions. Negotiations are ongoing, but the union has indicated that they will continue applying pressure until a satisfactory agreement is reached. The economic impact of the strike, especially given Montreal’s importance as a key logistics hub, could ripple through industries reliant on the port.
Sam’s Club Opens Self-Checkout Location
Sam’s Club is opening its first store without traditional checkout counters in Grapevine, Texas. This location requires shoppers to use the Scan & Go app to pay, eliminating the need for checkout lanes. Shoppers scan items with their smartphones as they shop, and pay directly through the app. The store will feature displays of online-only products, which can be ordered via QR codes. This initiative is part of Sam’s Club’s broader push towards digital engagement, which aims to streamline the shopping experience and encourage more frequent, smaller purchases. The store also uses AI-driven technology to prevent theft by scanning carts at the exit to ensure items match the payment. This frictionless shopping model follows the trend set by other retailers, such as Amazon, leveraging technology to enhance convenience.
