ATLANTIC Container Line chief executive Andrew Abbott expects strike action, if any, at US east coast and Gulf ports by members of the International Longshoremen’s Association will be short-lived after the January 15 negotiations deadline.

“The biggest issue was wages and that has already been agreed. Automation is really about increasing productivity to move more cargo through ports with limited land space. If it is done the right way, it will add more jobs, not fewer,” said Abbott, who has headed up ACL, the longest continually operating container line operator in the world, since 2003.

The ILA, which represents dockworkers, and the US Maritime Alliance (USMX), representing terminal employers and ocean carriers, agreed a tentative agreement for a 61.5% pay raise in October, ending a three-day strike.

The existing employment contract was extended to January 15 to negotiate the remaining issues, primarily container terminal automation.

“I’m confident the dispute will be resolved soon. Young Americans understand automation. The main discussion should be about the types of automation that can bring more volume and more jobs to the ports,” Abbott told Lloyd’s List in an interview.

“If the strike goes ahead for any significant length of time, the Chinese New Year cargo surge will back up ships all over the place,” Abbott said. “It would paralyse the country. I’m sure there will be a meeting of minds as there’s too much money at stake — for the union, the terminal operators, the carriers and American importers and exporters.”

He is also not overly concerned about the threat of tariffs on both Chinese and European imports from US President-elect Donald Trump.

And Abbott doesn’t believe raising higher tariffs on China will benefit European exporters or provide any significant boost to the transatlantic trade.              

Despite all the tough talk, the threat of higher tariffs on imports is a shrewd negotiating tactic to gain trade concessions from China and Europe. 

“Simply raising tariffs on Chinese imports would only hit the pockets of the very people that voted for the new administration,” said Abbott.

He cited US hypermarket giant Walmart as an example, whose sales contain a huge percentage of goods manufactured in China.

“There are no US manufacturers to replace most of the Chinese goods on the shelf, so it would only translate into higher prices for people on a limited budget,” he said.

“Europe, like the US, has high labour costs, and doesn’t make cheap clothes, dog toys or artificial Christmas trees. There could be some slight shifts in trade patterns but don’t expect a massive change to supply chains,” added the chief executive.

“We’re hopeful that Trump’s strategy will actually lead to stronger growth in US exports to both China and Europe, in exchange for some horse-trading on tariffs.”

ACL’s combined ro-ro and container service has been operating between northern Europe and the US east coast since the genesis of containerisation. In 1967 it was the first liner operator to introduce purpose-built deepsea newbuildings capable of loading containers in cellular holds.

With a multinational management team headquartered near New York, and as a subsidiary of Italian shipping giant Grimaldi Group since 2002, following several changes to its original shareholder structure in 1989, the company continues to keep the faith in its original hybrid ro-ro/containership concept and remains focused on the transatlantic.

Abbott himself joined ACL in 1977 and, despite a short stint with OOCL and a US-flag carrier in the early 1980s, he has been with the company ever since. Unsurprisingly, his knowledge of the transatlantic trade is without equal.

ACL has managed to survive as an independent company for so long because it has distinct port and cargo advantages that others do not have, and because it doesn’t attempt to compete with the big global operators.

In the container segment it focuses on smaller shippers that manufacture high-value products that need speed, personal attention and delivery precision. ACL has therefore gained a loyal following, especially from UK, Irish and Swedish exporters.    

Its clients require schedule reliability, for which ACL’s “no blanked sailings” reliability is well known, unlike many global operators.

“ACL has always been customer relationship focused. I know our top 100 clients and make a point of visiting them at least once a year. This builds up a trust element — many big carriers don’t want to see you unless you’ve got at least 1,000 containers to ship,” said Abbott.

While the company operates independently from liner operator alliances, ACL had had a slot-swap agreement with Germany’s Hapag-Lloyd since 1984. The agreement was ended by mutual consent earlier this year.

At the peak of the agreement, ACL utilised five Hapag-Lloyd services involving the exchange of some 1,000 teu of slots per week across each carriers’ vessels. 

Following the pandemic, and a subsequent surge in global container volumes, ACL found the relationship with its long-standing German partner began to change.

This was chiefly due to the global nature of alliances, and the movement of vessels between trades, making the services less than reliable in terms of schedule integrity.

“Hapag-Lloyd and ACL always treated each other like their best customer and throughout the entire 40-year agreement there was never one dispute. But once Covid started, everybody but ACL was blanking sailings. Containers were being left behind and so we had too many disgruntled customers,” said Abbott.

He is less than impressed with the tactics of the global boxship operators that added significant capacity to the transatlantic trade following the post-pandemic surge in exports to the US. This came after spot container freight rates peaked in October 2022.

“The big carriers added 45% more ship capacity in 2023. Not surprisingly, rates plummeted. Almost overnight the market collapsed. I thought 2024 was going to be a lousy year,” said Abbott.

However, the Red Sea crisis meant global carriers pulled a lot of their bigger tonnage out of the Atlantic and on to Asia trades. Rates began to stabilise in February when supply and demand were rebalanced again and have gradually climbed ever since, albeit nowhere near Asia service rate levels.

ACL today operates a single weekly string utilising its five “G4” class con-ros. Built in China between 2015 and 2017, they can load up to 3,800 teu but are also equipped with covered garage decks for 5,000 lane metres of rolling cargo, in addition to dedicated decks for up to 1,300 passenger cars.

Abbott confirmed that UK/Ireland is ACL’s “number one” market for both eastbound and westbound cargoes. Some 1,500 teu are allocated for exports from Liverpool on each G4 sailing.

The company continues to provide its fastest import call at Liverpool, followed by calls at Hamburg and Antwerp before coming back to Liverpool for its fastest export call. This gives ACL the best transit times in the market for British and Irish shippers.

Some 1,000 teu is loaded from Antwerp, including 350 teu fed to Antwerp from the Swedish port of Gothenburg. The remainder is allocated to German exports loaded out of Hamburg.

Ro-ro cargo remains an important part of ACL’s business and provides a lucrative buffer to the volatile transatlantic container trades. Construction equipment, farm machinery and large components for the aerospace segment fill the majority of the G4s ro-ro decks in both directions.

The $1.4trn US infrastructure bill passed two years ago has kept the G4s ro-ro decks, westbound, full of construction equipment on every voyage.

The G4s car capacity was either marketed by or chartered out to one of its first shareholders, Wallenius Wilhelmsen since day one. This was to serve Volvo car exports when ACL called directly at Gothenburg.

That relationship ended a few years ago and ACL now markets its own car space, focusing again on the UK. Its clients include luxury car manufacturer Jaguar Land Rover.

With a shortage of vehicle carrier capacity worldwide over the past few years, the major operators shifted tonnage away from the transatlantic trades to cover the big surge in exports of Chinese electric cars, to the benefit of ACL.

“ACL has been the only show in town with a fixed, day of the week ro-ro schedule,” said Abbott.

“But we are a very specialised car carrier. We don’t carry large volumes of cars. Our main focus is on big, overheight, overweight cargo that is difficult to handle. We don’t lift it; we drive it on and off the ship. That is our bread and butter.”