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Diversions from U.S. West Coast Could Become Permanent
Journal of Commerce Aug 18, 2014
Though negotiations between longshoremen and port employers on the U.S. West Coast have been uncharacteristically tame, the effects of the labor dispute on supply chains are beginning to become apparent, according to Fitch Ratings.
A statement from Fitch said that although both the International Longshore and Warehouse Union and the Pacific Maritime Association have pledged to keep cargo moving, the lack of a contract between the two means the ILWU could strike at any time. While the two parties have been publicly amicable towards each other, Fitch said shippers are still diverting cargo to avoid any potential problems.
“If this shift were to persist from weeks into months, some shippers may continue to use alternative ports even after the ILWU contract is finalized and the risk of a strike or slowdown has passed,” Fitch said. “The impact of such diversion could be exacerbated by the annual peak in shipping, which precedes the holidays.”
Read Full Article on Journal of Commerce »