Potential West Coast Ports Strike Consequences: Survey

By George Backwell
Friday, June 27, 2014
Container truck: File photo

National Retail System (NRS) one of the leading 3PL logistics providers in North America has released the results of its survey on how a West Coast ports strike could impact logistics in the USA. With a strike looming as the holiday season gets nearer, the NRS' survey found that only 52% of the companies who responded are prepared.

Although about 20% of those surveyed didn't know, or didn't want to disclose their potential losses in the case of a strike, the information from the remainder was quite stark.

 A week-long strike will not be too painful for most with 70% (of those that expressed a value) having losses of less than $250k, although 5% of the businesses will lose over $1 million with only a week long strike.

The picture if the strike extends for a month is much more serious with losses over $500k and above being suffered by 50% of those who provided an estimate figure.
 
The logistics professionals surveyed came from a variety of different sectors including 36% in manufacturing and 18% in retail, as well as 23% working for other 3PL logistics providers across the USA. The anticipated strike has seen a variety of contingency plans being put in place. The most popular of those is to use alternative ports.

The biggest winners of the alternative ports are the New England ports New York / New Jersey and Boston with 39% of businesses choosing to route trade through these. The up and coming port of Savannah, Georgia is the next most popular option with 26%, and the Canadian Port of Vancouver is seen as the third best option for a further 23% of companies.

While all of these ports are likely to see a short-lived boom if the strikes take place what will be interesting is how much trade will not return after a strike ends and still be routed through these destinations. Will businesses want to mitigate future risk and leave a proportion of their imports coming through alternatives?

The companies surveyed are big importers of goods into the USA. 59% of the respondents said that their companies imported more than 90% of their total inventory and 65% had at least 75% of their total imports currently routed through the West Coast posts.

With this heavy reliance on imported goods the importance of both a low risk and flexible logistics set up is vital and these businesses cannot simply look at headline shipping costs. Should the strike go ahead it will, without doubt, be costly for US businesses and their 3PL partners.

NRS considers that the seriousness of a potential West Coast port strike should not be under estimated, especially if it extends for any significant period of time. With individual companies suffering large losses through mitigation actions from air-freight to holding increased inventory.

The logistics industry will have it own headaches with the re-routing of vast amounts of shipping to East Coast ports and Savannah in Georgia, as well as through Vancouver, Canada.

Container drayage will be put under strain as normal logistics patterns will be changed enormously to cope. If the strike does go ahead and businesses suffer the scale of losses that are possible, will the West Coast ports ultimately then lose out in the long-run as companies choose to mitigate risk by shipping more freight via alternative ports as standard?

The full NRS survey results and charts are available at: http://bit.ly/1pFVAJT

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Henderson, Hanes & Associates Opens Doors in Miami

Ocean Engineering/ Naval Architecture Firm Brings Innovation to the Mega Yacht Community The Miami-based ocean engineering and naval architecture firm of Henderson & Associates, Inc.

DOF Installer Sells Offshore Vessel

DOF Subsea AS subsidiary, DOF Installer ASA, reported the sale of one of its three sister ships, an anchor handling tug supply (AHTS) vessel, to an international buyer.

Scanjet Secures 30-ship Tank Management Order

Scanjet Group has followed up its Tank Management order from Stolt-Nielsen with a series of contracts for its ITAMA Intelligent Tank Management concept including Tankcleaning,

Ports

Port City Plans for New Cargo Taxes Angers Kenya Govt, Shippers

Proposals by a local authority to impose new taxes on cargo at Kenya's main port has drawn opposition from the government and shippers, saying it will hike import

DP World Mulls Senegal Free Zone

DP World  is looking to develop a free zone in Senegal, Chairman Sultan Ahmed bin Sulayem said on Wednesday. Sulayem was speaking at an African investment event in Dubai.

Skangass Builds LNG Terminal in Pori, Finland

With investment support from the Finnish Government of 185 million NOK Skangass has decided to build a new import terminal for LNG. The terminal will be completed in 2016.

Finance

DryShips: Public Offering of Its Senior Secured Notes

DryShips Inc. announced today that it intends to offer senior secured notes due 2017 (the “Notes”) pursuant to its effective shelf registration statement. The Company

DOF Installer Sells Offshore Vessel

DOF Subsea AS subsidiary, DOF Installer ASA, reported the sale of one of its three sister ships, an anchor handling tug supply (AHTS) vessel, to an international buyer.

Port City Plans for New Cargo Taxes Angers Kenya Govt, Shippers

Proposals by a local authority to impose new taxes on cargo at Kenya's main port has drawn opposition from the government and shippers, saying it will hike import

Container Ships

Chinese Manufacturing Expansion Affects Shipping Demand

The expansion of the Chinese Manufacturing Industry continued in September at unchanged pace as compared to the month before, BIMCO reports. The manufacturing industry

Going Big for Sustainability

Orkot Marine Bearings, developed and manufactured by Trelleborg Sealing Solutions, contribute to the build of the world’s largest and most efficient containerships,

MOL Restructures Asia to S. Africa Service

Mitsui O.S.K. Lines, Ltd. (MOL) announced the restructuring of its existing Asia to South Africa liner services into two direct loops. One service will call South China,

Logistics

Chinese Manufacturing Expansion Affects Shipping Demand

The expansion of the Chinese Manufacturing Industry continued in September at unchanged pace as compared to the month before, BIMCO reports. The manufacturing industry

MOL Restructures Asia to S. Africa Service

Mitsui O.S.K. Lines, Ltd. (MOL) announced the restructuring of its existing Asia to South Africa liner services into two direct loops. One service will call South China,

DMR Examines Container Terminal Congestion Issues

Container port congestion has been hitting the headlines recently, but the reasons for it vary widely and in many cases it is only a short term issue. Certain world

 
 
Maritime Contracts Maritime Security Maritime Standards Offshore Oil Pod Propulsion Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1714 sec (6 req/sec)