Monday, February 23, 2015

Pacific Port Problems Possibly Palliated:

Long labor dispute has shippers looking for alternate shipping routes.

When an industry’s behind-the-scenes issues start to spill over into and even dominate mainstream national news, it’s usually not a good sign. This was certainly the case with the ongoing, protracted saga of the West Coast ports and their labor disputes.

The good news is that the agreement signed Friday night between the longshoremen of the International Longshore Workers Union and the port operators of the Pacific Maritime Association, if ratified by both groups, will allow the dock workers to go back to work on clearing up the backlog of ships and containers, and processing the staggering volume of cargo that moves through their facilities every day. The bad news, for the West Coast ports, is that it will be a long way back to regaining the trust of shippers and supply chain managers.

Industry experts agree that it will take months for Los Angeles, Long Beach, Oakland, Seattle and Tacoma -- all among the 10 largest ports in the U.S. -- to return to “normal” operations. Even then, the old normal will not be good enough to accommodate the cargo surges that occur each week as vessels with capacities of as many as 14,000 20-foot containers descend upon West Coast ports. In fact, the ILWU work slowdowns, and the PMA’s response of restricting night and weekend work, compounded problems that were already occurring anyway because of the arrival of massive ships operated by expanded carrier alliances.

West Coast ports may actually get a breather soon because the vessels that left Asia this week before Chinese New Year celebrations began will hit U.S. shores in early March. The ports will then have about three weeks of significantly-reduced cargo volumes while factories in Asia are closed for the celebrations, and this could give them a running start at working off the container backlogs that have accumulated in recent months.

In the long run, they get more of a respite than they would like. Surveys have shown retailers and direct shippers expressing new interest in shipping to East Coast ports, historically not plagued by labor strife to the same degree, with the expansion of the Panama Canal facilitating water transit to the Eastern half of the country, where the majority of goods are destined.

Two thirds of the U.S. population lives east of the Mississippi River, and the long-simmering mess at the West Coast ports has shippers looking at how best to reach them.

Kirk Shearer
800-989-0054 x103

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