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In a previous blog post, we discussed some of the material shortages being experienced throughout the global supply chain caused by a log jam at the West Coast Ports (West Coast port congestion causing real pain). Specifically the 2 biggest ports, Los Angeles and Long Beach have had congestion problems since November 2014.
The associations of port operators who have blamed the congestion on a union slow down; have decided to shut the ports down this upcoming weekend (Presidents day) to avoid paying overtime. The unions which include the International Long shore and Warehouse Union say that the congestion is caused by factors outside of their control like the availability of flat bed trucks to move cargo from the docks and claim the shutdown is a negotiation tactic.
Up to now the congestion problems have not had a major impact on the US economy, despite a number of anecdotal stories such as a shortage of McDonald French Fries in Japan reported last December. However according to NBC News, the congestion could have a 7 Billion dollar impact on US retailers in 2015 as they are experiencing higher costs due to air shipments and lost revenue due to material shortages. Many retailers already have shipping contingency plans in place that include air shipment or rerouting via East Coast ports.
The association of operators and the unions are scheduled to get back together on February 19th, but many believe that a lot more pain will be caused before any solution is reached. Even if a settlement is reached soon, experts are saying that it would take most of 2015 to clear the current congestions.
This labor dispute has a number of winners and losers:
Packnet creates custom packaging and crating solutions for businesses that import or export product. We are a licensed supplier of ISPM 15 compliant wood and provide our customers a number of options that help mitigate issues associated with overseas transport including corrosion protection, handing and environmental monitoring along with custom foam packaging for protecting products during transport and storage.