US retailers brace for peak season box port disruption

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US retailers are fretting over disruption at US west coast container shipping ports during worker contract negotiations, which has in the past caused a modal shift to airfreight.

The US National Retail Federation (NRF) this week urged US president Joe Biden to intervene in negotiations between International Longshore and Warehouse Union (ILWU) and the container terminal representative Pacific Maritime Association, which have failed to reach and ratify a new labor agreement following more than a year of talks.

Meanwhile, in recent days there have been widespread reports of disruption at major US container ports and accusations that unions are withholding labour.

“Thousands of retailers and other businesses depend on smooth and efficient operations at the ports to deliver goods to consumers every day,” said NRF senior vice president of government relations David French

“As we enter the peak shipping season for the holidays, these additional disruptions will force retailers and other important shipping partners to continue to shift cargo away from the west coast ports until a new labor contract is established.

“It is imperative that the parties return to the negotiating table. We urge the administration to mediate to ensure the parties quickly finalise a new contract without additional disruptions.”

Freight forwarding giant DSV yesterday issued a statement to warn customers of the potential disruption.

DSV said the actions include terminals in Los Angeles, Oakland, Seattle, and Tacoma. Together, the ports of Los Angeles and Long Beach are impacted.

Judah Levine, head of research at rate portal Freightos, said that Long Beach’s largest container terminal, TTI, was last week shut down before opening again on Monday evening.

However, he said that the closure of other terminals at Long Beach and disruptions elsewhere would reportedly continue into yesterday.

“Prolonged action will significantly impact truckers’ ability to both pick up and drop off containers, and cause delays and increased storage fees for export containers and for imports already at container yards or unloaded during a slowdown,” Levine said.

“They would also cause delays and congestion in the form of ships waiting to dock – which will tie up capacity and put upward pressure on freight rates – and a possible buildup of containers in container yards, which could in turn slow the speed at which ships will be unloaded and further impact trucking.”

In 2015, two weeks of industrial action at US west coast ports resulted in a surge in air cargo demand as shippers looked to catch up with delays to cargo. It took around six weeks for cargo backlogs at the ports to be cleared.

Consultancy Transport Intelligence practice leader Thomas Cullen said that this time the impact may not be as big.

He pointed out that for many months shippers have been moving traffic from west coast ports to other terminals, particularly on the US east coast where it is viable.

“The threat of a total strike on the US west coast seems less likely, not least due to the political pressure that would be brought to bear on the trade unions, with appeals to the [US] president already being made,” Cullen said.

“What is possibly more likely is a campaign of lower-level disruption reducing the efficiency of operations in terminals but just short of a complete stoppage.”

Levine also saw the east coast ports as a more viable alternative than in 2015, although he said they did have their limits.

“With east coast and Gulf ports operating normally and overall volumes down significantly from 2022 levels, some volumes could successfully be diverted to those ports, though – as 2022 showed – a significant enough disruption would likely cause some congestion and higher rates at the alternatives and still leave some backlog at the west coast ports that normally handle about 40% of the nation’s containers.”

He added: “The recovery from a significant slowdown could also be shorter than in 2015 due to new Covid-era strategies like off-site overflow yards and improvements in truck scheduling that could help unclog terminals themselves and speed the rate at which waiting ships can be unloaded and cleared.”

Tensions mount at US west coast box ports over labour talks

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Damian Brett

Damian Brett
I have been writing about the freight and logistics industry since 2007 when I joined International Freighting Weekly to cover the shipping sector.After a stint in PR, I have gone on to work for Containerisation International and Lloyds List - where I was editor of container shipping - before joining Air Cargo News in 2015.Contact me on [email protected]