Labor strike at L.A., Long Beach ports will divert freight

By Charlie Morasch, Land Line contributing writer | 11/30/2012

A labor strike by port workers in Los Angeles and Long Beach has closed several cargo terminals.
If the strike continues, shipping containers will be diverted elsewhere on the West Coast and could lead shippers to change routes to East Coast ports if the labor issues cause long-term changes, one expert told Land Line Magazine.
An estimated 7,000 clerical workers are represented by the International Longshore and Warehouse Union Local 63 at the twin ports, which bring in as much as 40 percent of U.S. imports. They have stopped working and set up picket lines outside most terminals. The port disruption prompted the world’s largest retail trade association, the National Retail Federation, to ask President Obama to intervene.
“A prolonged strike at the nation’s largest ports would have a devastating impact on the U.S. economy,” NRF President Matthew Shay said in a letter to the president. “We call upon you to use all means necessary to get the two sides back to the negotiating table.”
Eric Starks, president of the freight analysis firm FTR Associates, said predicting the length of labor negotiations is difficult.
“Things can change very quickly,” Starks said Friday. “The expectation is that this could drag on long-term, but we just don’t know.”
In the immediate future, shippers will likely divert container imports to other West Coast ports, Starks said.
“Initially, they will probably try to move things a little bit north but keep it on the West Coast and see if they can get things rerouted,” Starks said. “If this lasts more than a month, then I think you’ll start seeing some noticeable changes in behavior. From a trucking standpoint, trucking will still benefit, but it will depend on where you are location-wise.”
Truckers with regular routes delivering port cargo from Los Angeles in northern California, Arizona and Nevada might take a hit, Starks said. Regional companies on the East Coast, he said, would stand to benefit, though the Port of New York and New Jersey may have difficulty as that region continues to rebound after Hurricane Sandy.
“The strike definitely creates a lot of headaches for the system,” Starks said.
Because of the timing of the retail shipping cycle, the strike will have little effect on holiday retail freight, Starks said.
Negotiations resumed Thursday evening, the Port of Long Beach said in a news release Friday morning, adding that the strike has forced the closure of three of the port’s six container terminals.
“The remaining terminals – SSAT at Pier A, SSA/Matson at Pier C and Pacific Container Terminal at Pier J – are operational,” the Port of Long Beach said in the release. “All non-container terminals are operational.”

Seven of Los Angeles’ eight container terminals were shut down due to the strike, the port said in a news release. Only the Trapac terminal remained open.

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