Hampton Roads likely to benefit from West Coast port dispute

The labor dispute between West Coast dockworkers and port managers continued to flatline Thursday, with 29 ports from the Pacific Northwest to Southern California virtually shut down because of a “partial lockout.”

The West Coast labor issue appears to be benefiting East Coast ports – including Hampton Roads – and could continue to do so this year and beyond.

According to The Associated Press, West Coast employers said they weren’t calling in workers to unload container ships.

Fifteen ships scheduled to call Thursday at the ports of Los Angeles and Long Beach, Calif. – the nation’s two largest ports – were set to join about 20 others already anchored off the coast, waiting for berths.

West Coast longshoremen have been working without a contract since July.

There’s no question that some diversion of cargo from the West Coast to the East Coast has been under way for months – only how much.

“We see growth across the trans-Atlantic, more cargo coming in from Asia because people need a second outlet, but I can’t quantify the impact,” said John Reinhart, the executive director and CEO of the Virginia Port Authority, in a recent interview.

In 2014, Hampton Roads moved more containers, as measured in 20-foot units or “TEUs,” than any other year in its history.

But so did the ports of New York/New Jersey and Savannah, Ga., the East Coast’s largest and second-largest container ports, respectively. Hampton Roads ranks third.

A survey of 87 U.S. shippers late last year by The Journal of Commerce, a trade publication, found that 66 percent planned to ship less cargo through the West Coast in 2015 because of the delays.

The December report said the survey results suggested that “ports from Long Beach to Seattle could lose market share just as they did after a 10-day work stoppage in 2002.”

Some members of the Washington, D.C.-based National Retail Federation, the world’s largest retail trade association, have said they’re “getting fed up and frustrated with what’s happening on the West Coast” and looking for alternatives, said Jonathan Gold, vice president of supply chain and customs policy, in an interview Thursday.

He added that the group has heard from members who said “that they’re done – they want to go to the East Coast.”

Gold said he believed some of the big container-volume gains last year at the three largest East Coast ports are directly attributable to diversions of West Coast cargo.

Joe Harris, a Virginia Port Authority spokesman, said in an email Thursday that the port is monitoring the West Coast situation and working with all of its stakeholders to ensure consistent service.

“The impasse is presenting widespread challenges to the nation’s logistics and supply chains, manufacturers, consumers and the nation’s economy,” he said. “The longer this situation lasts, the longer it will take to return to normalcy.”

Source: Pilot Online