Maersk CEO Vincent Clerc has expressed confidence that the ongoing contract negotiations between the International Longshoremen’s Association (ILA) and East Coast port employers will not lead to a strike, citing historical precedent.

The 6-year agreement covers approximately 14,500 port workers on the US East and Gulf Coasts and runs from October 1, 2018, through September 30, 2024. The labour talks came to a standstill in June after the ILA “discovered the use of an autonomous gate system” at Alabama’s Port of Mobile and other locations. The ILA argued that the system, used to process trucks, violated their existing agreement with the United States Maritime Alliance (USMX). In response, the union decided to halt further labour negotiations until the issue was addressed.

Read also: ILA digs in over process automation

Clerc pointed out that while labour disruptions, including strikes, have occurred on the West Coast during contract negotiations, such events have never materialized on the East Coast.

“I still look at the likelihood of having a really strong industrial action, like a strike, as highly unlikely,” Clerc said while speaking at an earnings call on Wednesday. “While we have had lockdowns and strikes and a lot of disruptions, in connection with negotiations on the West Coast, it has never been the case on the East Coast.”

With the current contract set to expire in September, Clerc anticipates the possibility of an extension to allow for further negotiations. Despite the challenges, he remains optimistic that an agreement can be reached without resorting to a strike.

However, Clerc acknowledged the potential impact a strike could have, should it occur. “ I hope that we can come to’ see eye to eye’ with the ILA without having to get there. If this were to happen, the impact of such a strike could be potentially quite significant in terms of congestion, delays, and the absorption of capacity that it would suddenly create. That would create a big bottleneck in a very travelled trading route,” he warned.

In July, USMX said in a statement that it remains willing to return to the bargaining table with the ILA. Meanwhile, last week ILA called its members covered by the Master Contract with USMX to Wage Scale Committee Meetings set to be held in September. The meetings will mainly focus on ILA Wage Scale Delegates reviewing demands made to USMX. However, the ILA president and chief negotiator mentioned that the union will also use the gathering to prepare for a possible coast-wide strike on October 1, 2024, if a new agreement isn’t reached by then. ILA has also sent letters to all its employer groups indicating the current agreement between the two parties was expiring on September 30, 2024, and would not be extended.

Maersk CEO Vincent Clerc has expressed confidence that the ongoing contract negotiations between the International Longshoremen’s Association (ILA) and East Coast port employers will not lead to a strike, citing historical precedent.

The 6-year agreement covers approximately 14,500 port workers on the US East and Gulf Coasts and runs from October 1, 2018, through September 30, 2024. The labour talks came to a standstill in June after the ILA “discovered the use of an autonomous gate system” at Alabama’s Port of Mobile and other locations. The ILA argued that the system, used to process trucks, violated their existing agreement with the United States Maritime Alliance (USMX). In response, the union decided to halt further labour negotiations until the issue was addressed.

Read also: ILA digs in over process automation

Clerc pointed out that while labour disruptions, including strikes, have occurred on the West Coast during contract negotiations, such events have never materialized on the East Coast.

“I still look at the likelihood of having a really strong industrial action, like a strike, as highly unlikely,” Clerc said while speaking at an earnings call on Wednesday. “While we have had lockdowns and strikes and a lot of disruptions, in connection with negotiations on the West Coast, it has never been the case on the East Coast.”

With the current contract set to expire in September, Clerc anticipates the possibility of an extension to allow for further negotiations. Despite the challenges, he remains optimistic that an agreement can be reached without resorting to a strike.

However, Clerc acknowledged the potential impact a strike could have, should it occur. “ I hope that we can come to’ see eye to eye’ with the ILA without having to get there. If this were to happen, the impact of such a strike could be potentially quite significant in terms of congestion, delays, and the absorption of capacity that it would suddenly create. That would create a big bottleneck in a very travelled trading route,” he warned.

In July, USMX said in a statement that it remains willing to return to the bargaining table with the ILA. Meanwhile, last week ILA called its members covered by the Master Contract with USMX to Wage Scale Committee Meetings set to be held in September. The meetings will mainly focus on ILA Wage Scale Delegates reviewing demands made to USMX. However, the ILA president and chief negotiator mentioned that the union will also use the gathering to prepare for a possible coast-wide strike on October 1, 2024, if a new agreement isn’t reached by then. ILA has also sent letters to all its employer groups indicating the current agreement between the two parties was expiring on September 30, 2024, and would not be extended.