A FREIGHT newsletter is raising fears that the west coast International Longshore and Warehouse Union, currently in contract talks, will likely engage in slowdowns to provide leverage in negotiations rather than to strike outright.
FTR Transportation Intelligence's State of Freight Today newsletter said the ILWU will likely stress market until "port operators and shippers suffer enough to make concessions".
With bargaining talks over the next three months expected to be difficult and supply chains in North America "strongly affected", shippers have been "moving up their orders and shifting routing," said FTR Transportation Intelligence's managing director Noel Perry.
"Intermodal Association of North America data indicates that movements of international containers on rail were up over 11.5 per cent year over year in April," he said.
A recent survey found two-thirds of international container shippers were contemplating moving a portion of their west coast volumes through other ports, reported American Shipper.
Mr Perry said ports in the northeast will have trouble handling such a big shift in volume as they are already congested and have seen a decline in productivity owing to the shift to bigger ships, resulting in a concentration of activity on some days and little activity on others.
"This leads to congestion and reduced capacity utilisation in fixed facilities and drayage trucks," said Mr Perry, and that the driver shortage has hit the port drayage market very hard.
He added that the shift by the ocean liners away from supplying chassis has been plagued with spot shortages owing to equipment hoarding by truckers.
Railways are also troubled by the uneven daily volumes coming out of northeast ports from barge ships, and inland drayage operators are having the same drayage problems as in the northeast.
"This predicament reminds us of what we have learned about the overall trucking market. Fifteen years of difficult conditions have stripped the market of its surge capacity, the kind of buffer that mitigated problems in the past.
"Until shippers become willing, again, to fund surge capacity, they will suffer when the market is stressed by any outside force that demands extra capacity: bad weather, new regulations, sudden growth - or contentious contract negotiations on the west coast," he said.
US west coast ports handle 12 million TEU a year, or 43 per cent of container port activity, equivalent to 26 million truck movements and 5.1 million intermodal moves.
PORTS
28 May 2014 - 23:21
US west coast dock talks to cause port slowdowns, cargo diversions
A FREIGHT newsletter is raising fears that the west coast International Longshore and Warehouse Union, currently in contract talks, will likely engage in slowdowns to provide leverage in negotiations rather than to strike outright.
PORTS
28 May 2014 - 23:21
US west coast dock talks to cause port slowdowns, cargo diversions
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