Are Shippers Fleeing US West Coast Ports?

US West Coast ports are still at risk of a strike or other form of industrial action, forcing shippers to divert their cargo to different routes, as well as to use other distribution methods, Fitch Ratings reports.

The ongoing contract talks between the International Longshore and Warehouse Union (ILWU) and  Pacific Maritime Association (PMA) have led to a situation in which West Coast longshoremen are currently working without contracts and could go into strike at any time.

It is of little comfort to the shippers that the contract negotiations seem amicable, and the fact that cargo going through the West Coast ports has been moving without significant delays since the last contract expired on June 30.

Despite the fact that a long-lasting strike is unlikely, some shippers might be diverting their cargo in order to bypass possible delays.

DP World Vancouver, feeling the effects of West Coast bound cargo being diverted, has quit receiving containers bound for the U.S.A. going to its rail Centerim terminal, explaining that there is rail car shortage.

The effects can be long-term, with shippers opting for using these alternative ports even after the contracts are signed.

The annual peak of shipping, usually coming before the holiday season, could exacerbate the effect of the diversion.

A tentative agreement for a new contract covering grain terminals in the Pacific Northwest was reached on August 11, by a negotiating committee representing five International Longshore and Warehouse Union (ILWU) local unions in Vancouver, Portland, Seattle, and Longview.

The membership of each local union will review the tentative agreement and vote according to their internal rules, with results to be announced August 25.

On the other hand, shifting cargo from U.S. West to East Coast are all fueling the growing cargo volumes at Georgia’s deepwater ports, according to the Georgia Ports Authority (GPA) that reaped all-time high results during the first year half.