Dear Partners,

There has been a lot of media coverage about the threat of a West Coast port strike this year. If this were to happen, it would have a major effect on imports from the Far East. Some steamship lines have already sent out notices of a port congestion surcharge. In order to help you prepare better, we would like to explain the situation:

It is obviously difficult to predict what exactly will happen, but we think that likelihood of a strike or lockout actually happen is relatively low.

The current ILWU contract is expiring on July 1, 2014. Negotiations are set to begin in May, and the goal of these talks is to reach an amicable agreement on a renewed contract. There is a chance that we may encounter slowdowns at the port, work stoppages, or if escalated a strike or lockout. Most industry exports have predicted that there will be no strike this time, due to the volume of business that shifted to US East Coast ports in 2002 (and never returned).

So we anticipate that the chance of a strike or lockout actually happening is low.

If however there is a strike, then a small percentage of vessels will divert to Canadian ports, but most will simply anchor off the West Coast. While Canadian ports gear up for additional volume during the weeks following the July 1 deadline, they will only be able to handle a small percentage above their own peak volume period at the same time.

The only definite way to avoid any chance of encountering strike-related delays will be to re-route shipments to the East Coast or to Houston at this time. This will be costly, but in case any risk of delays needs to be excluded, this is what we recommend.

In case delayed delivery for a part of the ordered quantities is acceptable, it would be more cost effective to prepare to have smaller quantities shipped by air in order to have "some" product available for delivery while the port situation is being resolved.

I hope this helps - please feel to contact me anytime in case there is anything further I can help with.

 

Best regards -

 

Hardy