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

People & Company News

Brent Crude Slips Towards US$102

Brent crude fell towards $102 a barrel on Tuesday on concerns of slowing oil demand growth due to weak economic recoveries in China and Europe, although new unrest

SGS Wet Welding Repairs Approved by DNV GL

DNV GL and Subsea Global Solutions LLC (SGS) say that they have completed an extensive joint research and development program, that will allow permanent repairs

Aker Solutions Update on Company Hive-Off

Aker Solutions informs updated unaudited financial information for the two companies - the new Aker Solutions and Akastor - that will be formed following the split

Ports

Tankship-specific Version of FindaportCD Released

Harbour & terminal information providers, Shipping Guides Ltd, says its latest tanker-specific  addition enables customers to access the most comprehensive port

Panama Canal Generates VER Carbon Credits

The Panama Canal Authority (ACP) informs it has certified Verified Emission Reductions (VERs) or carbon credits, within the framework of the Sustainable Forest

NZ's Lyttelton Port Recommends Offer, to Pay Special Dividend

The board of New Zealand's  Lyttelton Port Co. Ltd recommended minority shareholders accept an offer of NZ$3.95 a share offer from the commercial arm of the Christchurch city council.

Finance

Brent Crude Slips Towards US$102

Brent crude fell towards $102 a barrel on Tuesday on concerns of slowing oil demand growth due to weak economic recoveries in China and Europe, although new unrest

Aker Solutions Update on Company Hive-Off

Aker Solutions informs updated unaudited financial information for the two companies - the new Aker Solutions and Akastor - that will be formed following the split

Russia's Shipping Major Reports Strong 1H 2014

OAO Sovcomflot (SCF Group), Russia’s largest shipping company and a global leader in seaborne energy transportation and offshore services, has announced its financial

Container Ships

NYK Opens New Planning Center in Kumamoto

On September 1, 2014, NYK and Kozo Keikaku Engineering Inc. established a stowage planning center for container shipping at the Kumamoto office of Kozo Keikaku Engineering Inc.

More German Shipowners Look to Gibdock for Repairs

Gibdock remarks it has continued to see its stock rise amongst the German shipowner community over the past year. Indeed the Gibraltar ship repair yard’s recent

No Sign of Ultra-Large Containership Mega Hubs: Analysis

Contrary to the views of some in the industry, Ultra Large Container Vessels are continuing to call at multiple North European ports per loop and are not concentrating on a mega-hub,

Logistics

Tankship-specific Version of FindaportCD Released

Harbour & terminal information providers, Shipping Guides Ltd, says its latest tanker-specific  addition enables customers to access the most comprehensive port

Bulk Equipment is Delivered to Syzran Refinery

A reactor and a cold high-pressure separator is delivered to the site of Rosneft subsidiary Syzran Refinery for the constructed diesel hydro-treater. The unit

Gazprom Neft Starts Oil Production, Shipments from Iraqi Badra Field

Russia's Gazprom Neft said on Monday it started commercial production and shipments of oil produced at its Iraqi Badra oil field. Gazprom Neft, the oil arm of state gas company Gazprom ,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Port Authority Ship Electronics Ship Repair Ship Simulators 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: 0.3343 sec (3 req/sec)