TopNews

Shippers Divert Cargo, Increase Stocks Against More Port Shutdowns

November 7, 2002

SHARING TOOLS        | Print Subscribe
U.S. shippers, uncertain over timely settlement of the West Coast ports dispute, are making contingency plans against additional service disruptions,
according to a nationwide survey by logistics specialist BDP International.
Currently favored actions, reported by 74% of supply-chain managers surveyed, include cargo diversions to East Coast ports, favored by almost 52%; increases in safety stocks, 34%; alternate sourcing, 29%; and diversions to Gulf Coast ports, 29%. Shippers also anticipate long-term changes in supply-chain management, to be prepared for similar disruptions in the future.
West Coast ports reopened Oct. 9, after the Bush administration imposed an 80-day cooling-off period under the Taft-Hartley Act. Federal mediators this week ordered a one-week break after negotiators failed to reach agreement on pension provisions.
BDP and its Centrx supply-chain-consulting unit commissioned the survey by Adler Research between Oct. 24 and Oct. 30, two days before announcement of the tentative agreement on one key issue -- technology.
Nearly 63% of managers surveyed then were not optimistic about a timely settlement. Fully 53.5% favored extending the Taft-Hartley cooling-off period beyond the current 80-day limit.

Among other findings, almost 63% of respondents said the West Coast port work stoppage came unexpectedly. Still, 44% reported preparing contingency plans prior to handle possible problems.
Reported one shipper, "We were prepared for a number of two- or three-day closures that would cause one-week or two-week backlogs. We did not expect a two-week closure that would cause a month-or-more backlog."
Another said, "I would have expected this during July, but not so far down the road. I can't believe this was allowed to happen, considering the major impact it would cause to a vast number of economies."
Other shippers reported layoffs, angry customers and financial impact from lost sales and higher transportation costs. The business impact to one international shipper was compelling: "We are very discouraged. This is the first year that we have imported from Asia and it has been a terrible experience."
Said another importer, "One product line was unable to ship for the month of October because it was sitting on a boat waiting to be unloaded. This hurt the company and its customers."
Not all shippers complained, however. Wrote one, "It was great. It helped our sales. We are a U.S. manufacturer...and with reduction in foreign dumping...our company received orders from many companies looking for a domestic alternate source."
As for long-term effects, while more than 48% of respondents reported no plans to alter supply chain strategies due to the shutdown, a 52% majority planned increased reliance on alternate port facilities. East Coast ports were the clear favorite, at 33%, followed in descending order by ports along the Gulf Coast, 21%; in Canada, 16%; and Mexico, 6%. About 21% of shippers planned to increase safety stock, while the same percentage expected to seek alternate sources for essential items.
BDP International, co-sponsor of the research, is a privately owned global logistics and transportation services company headquartered in Philadelphia. It operates freight import/export logistics facilities in more than 20 cities throughout North America and a network of wholly owned subsidiaries, joint ventures and strategic partnerships in more than 140 countries.
Centrx, the other co-sponsor, is an independent unit of BDP established to share intellectual capital with companies seeking to achieve greater supply chain value and logistics process improvement on a global level.


Comment On This Story

Name:  
Email:  
Comment: (Maximum 2000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

Newsletter

We offer e-newsletters that deliver targeted news and information for the entire fleet industry.

GotQuestions?

LUBRICANTS

The expert, Mark Betner from Citgo will answer your questions
Ask a question

Sponsored by


WHEEL ENDS SOLUTIONS

Wheel end expert Jeff Geist from STEMCO will answer your questions
Ask a question

Sponsored by

Magazine