$5 billion in cargo stuck off West Coast ports in truck, container jam
Data from MarineTraffic has shown a “significant surge” in the average number of containers waiting outside of port limits on the US West Coast. The International Longshore and Warehouse Union has been operating at a “slow and go” pace which is causing a slowdown in ground port productivity, leading supply chain intelligence to estimate that the value of the waiting containers could be as high as $5.2bn. Analysts worry that if these labour disputes continue, port efficiency could slow to pandemic-like backlogs. The West Coast saw the loss of a lot of volume to East Coast ports over the past year due to volatile labour talks.
What is causing the slowdown to port productivity on the US West Coast?
The International Longshore and Warehouse Union has been operating slowly which means a backlog of containers is waiting outside port limits, leading to estimated losses of $5.2bn.
What impact could this have on US supply chains?
If port productivity continues to falter, there could be a similar supply chain backlog to that which was experienced during the pandemic.
Could vessels begin diversions again?
West Coast ports recently began to gain back volume they had lost to East Coast ports due to volatile labour talks. However, a continuation of significant slowdowns could see the diversions of vessels, which leads to extra charges for shippers.
Is there another way for international shipping to reach the US other than the Panama Canal?
If ships do start to divert, they could use the Panama Canal. However, charges in addition to normal costs are levied due to the canal’s critical situation with lower water levels. Another option is to traverse around the horn of South America, which could add weeks of travel time and extra charges.
Truck and Container Congestion Causes $5 Billion in Cargo to Stall at West Coast Ports
A virtual standstill at West Coast ports is causing alarm among shippers, who fear supply chain disruptions similar to those experienced during the Covid-19 pandemic. MarineTraffic has reported a “significant surge” in the number of containers waiting outside port limits due to the International Longshore and Warehouse Union’s slowdown, with the value of 86,381 containers floating off the ports of Oakland, Los Angeles and Long Beach reaching $5.2bn, according to customs data. The Pacific Maritime Association has accused the union’s workforce of failing to show up to work, while union leaders have declined to comment citing ongoing labour talks.