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International Shipping
Big shippers warn of east to west coast import shift if ILA dock talks stall
Date:2018-03-09 Readers:
MORE than 100 major shippers and shipping firms have warned the east coast dockers union and waterfront employers that they will divert imports to the more tranquil west coast if stalled dock talks do not soon resume.

A coalition of beneficial cargo owners (BCOs), agribusinesses, logistics providers led by the National Retail Federation, "expressed deep concern" over the breakdown in talks between the United States Maritime Alliance (USMX) and the International Longshoremen's Association (ILA).

The two ended contract talks on December 6 over the definition of what constituted an "automated terminal". The current master contract covering east and Gulf coast ports expires on September 30, noted IHS Media.

Last year, west coast employers agreed to extend the west coast waterfront contract to July 1, 2022. That gives BCOs four peak seasons without labour strife.

Cargo diversion is expected to accelerate as the September deadline approaches, reversing a trend of cargo increasingly opting for the east coast partly because of the newly expanded Panama Canal has reduced slot costs on that route.

The west coast share of US imports from Asia dropped by 12 per cent from 79 per cent in 2005 to 67 per cent in 2016, based in part on labour trouble at west coast ports.

The Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) had contentious contract negotiations in 2002 and again in 2014 to 2015 that involved crippling union work go-slows.

Shippers stress their reliance on certainty in cargo routing. If they enter a year in which no longshore contract negotiations are scheduled, they plan their entire supply chain for the year based upon assurances of port performance.

But, even if there are no early warnings of labour strife, shippers will hedge to avoid being shut out later in the year if contract negotiations break down.
source:http://www.shippingazette.com/menu.asp?encode=eng
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