East & Gulf Coast Port Strikes and Disaster Relief Update

A massive labor strike that could cost the US economy $5 billion daily. Join us on Traction Control as we reveal the staggering impact of 45,000 dock workers walking out at 14 US East and Gulf Coast ports. Beginning at 12:01 am on October 1st, this disruption is shaking up the automotive aftermarket sector, potentially causing daily losses of nearly $340 million. We break down the labor dispute involving the United States Maritime Alliance and the International Longshoremen's Association, providing you with statements from both sides and insights into President Biden's decision not to invoke the Taft-Hartley Act. Tune in to hear how industry experts are navigating the rerouting of automotive parts imports and exports, compounded fees, and what businesses can do to weather the storm. 

Discover the advocacy efforts of the Auto Care Association and learn how you can contribute your own port strike impact stories to strengthen our collective voice. 

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To learn more about the Auto Care Association visit autocare.org.

To learn more about our show and suggest future topics and guests, visit autocare.org/podcast

Episode Transcript

Stacey Miller (00:13):
Welcome to Auto Care On Air, a candid podcast
for a curious industry.
I'm Stacey Miller, icePresident of Communications at
the Auto Care Association, andthis is Traction Control, where
we chat about recent news fromthe global to the local level
and what it may mean to theindustry, featuring guests on
the front lines.
Let's roll, welcome back toanother episode of Traction

(00:39):
Control.
And unfortunately, as of today,a strike of 45,000 dock workers
has officially begun at 14 USEast and Gulf Coast ports,
starting at 12.01 am EasternTime today, tuesday October 1st.
The strike is expected to causesignificant disruptions to the
supply chain, with estimatessuggesting that for every day

(01:01):
the strike continues, it willtake five to seven days to
recover from the associateddelays.
A JP Morgan analysis predictedthat a strike could cost the US
economy $5 billion daily.
Now, despite last-minuteefforts, the United States
Maritime Alliance, or USMX, andthe International Longshoremen's
Association, the ILA, wereunable to reach an agreement

(01:24):
over the weekend.
Usmx officials met last Fridaywith Transportation Secretary
Pete Buttigieg, acting LaborSecretary Julie Hsu and top
White House economic advisorLael Brainard in hopes of
brokering a deal.
The ILA was invited butdeclined to participate.
In recent statements posted onthe ILA's official Facebook page

(01:47):
, the union voiced concerns overthe threat of automation and
criticized Ocean Carrier'smega-billion-dollar profits,
while ILA longshore wages havereportedly remained stagnant.
The USMX has also issuedstatements that the ILA has
repeatedly refused to come tothe bargaining table.
According to the USMX, this isthe first walkout by dockworkers

(02:13):
on the East Coast since 1977.
Now President Biden has statedthat he does not plan to invoke
the Taft-Hartley Act andencourages the parties to engage
in negotiations.
The Taft-Hartley Act, which waspreviously used by President
Bush in 2002 during the WestCoast port strike, would grant
the president authority tointervene in labor disputes that
threaten national security,forcing both parties to return

(02:34):
to the negotiating table andrequiring longshoremen to return
to work.
The Auto Care Associationcontinues to work with industry
groups representing industriesacross the US to urge President
Biden to work with both sides ofthe ongoing labor negotiations.
We did send a letter and youcan see that on our website at
autocareorg.

(02:55):
Us automotive parts exports andimports represent $51.2 billion
and $138.9 billion respectively,and that's from our AutoCare
2025 fact book.
And with the looming threat ofmultiple ports closing along the
United States coastlines, usautomotive aftermarket
businesses could risk losing upto nearly $340 million each day.

(03:19):
The strike prevents importsfrom being delivered.
Now, in 2023, nearly 25% ofautomotive parts were imported
through the East and Gulf Coastports that are at risk of
disruption from this laborstrike, so members currently
have already reported importsbeing diverted to West Coast
ports, which are seeing a hugesurge in imports and will also

(03:41):
be impacted by the labor strike.
This is compared to nearly 40%of imports that are imported via
truck and rail freight throughland port of entry from Mexico,
and the source of that is the USInternational Trade Commission.
Now a key concern for importersis the compounding fees
associated with container pickup, demurrage charges and

(04:04):
container returns, which areknown as detention charges, that
may be assessed during the portstrike and during the
subsequent recovery period.
The Federal Maritime Commission, or FMC, issued a final rule
intended to add clarity toinvoicing requirements outlined
in the Ocean Shipping Reform Actof 2022, which reaffirmed that
demurrage and detention chargesbe reasonable and applied in a

(04:27):
way that serves their intendedprimary purposes as financial
incentives to promote freightfluidity.
Members that believe theircharges are not in compliance
with the Shipping Act areencouraged to file complaints
with the FMC, and you can find alink to that on our website at
autocareorg.
Now, as the East and Gulf Coastports handle a significant

(04:50):
portion of our industry'simports and exports, and a
prolonged strike would strainthe supply chain, lead to
billions of dollars in losses,as well as delays in the
movement of goods, making itdifficult for repair shops and
distributors to meet demand.
In addition to the disruptionat East and Gulf Coast ports,
west Coast ports are alsoexperiencing a surge in cargo,
which could slow down themovement of goods in that region
as well.

(05:10):
But we need to hear from you onthese issues, so please share
your port strike impact storiesto help support our advocacy
efforts.
You can also find the link tothat on our website at
autocareorg.
Switching gears to.
Another story that's disruptingour supply chain and
unfortunately causing issues allacross the southeastern United

(05:33):
States is the aftermath of therecent hurricane, and we've
unfortunately learned that manyautomotive aftermarket industry
team members have been deeplyaffected.
The Automotive AftermarketCharitable Foundation, or AACF,
is here to offer support duringthese challenging times and,
understanding the uniqueobstacles of a natural disaster,

(05:54):
especially one of theseunprecedented proportions, the
AACF has streamlined theapplication process to get aid
to those in need moreefficiently.
So if you or someone you knowin the industry has been
impacted, please, please, pleasecomplete the natural disaster
relief application on the AACF'swebsite, that's
aftermarketcharityorg, and theAACF is also accepting donations

(06:18):
to directly support thoseaffected by the storm.
Every contribution helps providevital assistance.
So to donate, everycontribution helps provide vital

(06:47):
assistance.
So to donate again.
Please do visit their websiteat aftermarketcharityorg.
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content.
Autocare OnAir is a productionof the AutoCare Association
dedicated to advancing the autocare industry and supporting
professionals like you.
To learn more about theassociation and its initiatives,
visit autocareorg.