West Coast Port Aftermath
The unions realized this and it is why they take action, as they know the far-reaching damage it can cause and they use this as leverage in the negotiation process. When both sides dig their heels in, it usually results in government involvement, which is taking place via the US Secretary of Labor meeting, with both sides. They will be advised that they have until today (February 20, 2015) to come to an agreement or they will need to negotiate in Washington D.C. This would result in President Obama’s involvement as well.
If no agreement can be reached at that point, President Obama can invoke the Tart-Hartley Act, which will force the unions back to work while a board of inquiry is appointed to work on settling the dispute. The President can take this step when he believes a strike would endanger national health or safety, and he can obtain an 80-day injunction to stop the continuation of a strike. It is my opinion that the sooner this is done, the better off we will be.
So what does this mean for Arpin International Group and our customers and clients? This will result in long delays and additional fees due to the port situation as it will take many months for the ports to “catch up” once this is finally resolved. The backup of vessels is already at a very large number and will only grow each day.
My personal opinion based on the volume to these ports and amount of time that has already elapsed is that we will feel the impact of this well into 2016. The steamship lines have already begun to change routes, as they do not want vessels sitting idle waiting to be off-loaded. The trickle down impact will start to hit all the other ports as industries start to re-route all shipments to East Coast and Gulf ports which will ultimately have a slow down on process due to the increased volume.
This will also impact the rail system indefinitely as many shipments will be routed via East Coast to be moved via rail to the West Coast to avoid the ports on the West Coast altogether. All of the above results in extended transit times from door to door and some additional costs due to increased port fees or re-routing fees to avoid lengthy delays.
Arpin International Group will continue to try and keep all customers and clients up to date but would encourage understanding and patience for any shipments destined for the West Coast as we continue to review all possible options to keep costs at a minimum while we deliver to our customers as timely as possible given the circumstances.
Submitted by Mark Dearborn, VP of Corporate Accounts, Arpin Group