The labor issue was high on the list of concerns at TPM last week. It is evident to all that a strike by the ILWU or lockout by the terminals would cause disastrous effect on top of an already severely congested port complex. This has prompted many importers to build in alternative routing to U.S. East Coast ports, as a hedge against the effect of such possible actions.
However, if many importers shift their routing, it can have a severe impact on U.S. East Coast ports—who are already suffering from unprecedented congestion and delay. Ocean carriers are beginning to offer better rates to U.S. West Coast ports by comparison to preserve the balance between coasts. Extensive shifts in service strings will be just as difficult for the carriers to manage as any labor action.
The JOC noted, “‘we need to make sure the contract negotiations don’t result in additional congestion issues,’ said NRF CEO Matthew Shay. The negotiations ‘will come at a critical time for the retail industry as the peak shipping season for the important holiday season begins this summer.’ But sources at TPM22 with knowledge of the negotiating scenario downplayed the likelihood of an early deal, saying negotiations could possibly stretch into the third quarter of the year.”
At this point, it’s hard to predict exactly how these negotiations will impact the ports but concerns are rising.
