cussions go badly in August, you’re going to
be late to the game,” he said. “If it’s much
after July, it’s going to be a chore to find a
ship.”
Sappio said he believes a strike or lockout
is unlikely and that any inventory shift that
occurs as a result will be short-lived. He
added, however, that port congestion, espe-
cially at Los Angeles and Long Beach, is a
“certainty” should a work stoppage occur.
Sappio surmised that some carriers may
pre-file a “congestion surcharge” to offset
unforeseen operating expenses arising from
any supply chain disruptions in the East.
This would come on top of “peak season”
surcharges on Asian import traffic ranging
from $480 to $675 per container. Those
surcharges are expected to hit over the next
few weeks.
Timothy R. Simpson, a spokesman for
Copenhagen-based A.P. Møller Maersk, the
world’s largest liner company, was unaware
of any congestion surcharges under discussion.
Henry L. (Rick) Wen Jr., vice president,
business development/public affairs for the
U.S. arm of liner giant Orient Overseas
Container Line Inc., said that in the event
of a work stoppage, ships already laden
with imports could declare “force majeure,”
a legal maneuver shielding them from
damages should an event outside of their
control prevent them from fulfilling their
contractual obligations.
Wen said ship lines would consider
diverting vessels to Canadian ports and
offloading freight there, or simply lying at
anchor until the strike is settled. Regardless
of the scenario, delays and bottlenecks
would ensue because Canadian ports
would be overwhelmed by all the diverted
cargo. As a result, importers and exporters
would be subject to additional charges
under “force majeure” terms, he said.
While a work stoppage would mostly
affect the flow of U.S. imports from
Europe, cargo flows on both coasts would
be stymied if the ILWU struck in sympathy
with their East and Gulf Coast brethren. In
a saber-rattling statement in early May,
ILWU International President Robert
McEllrath voiced full support for ILA
workers. “The fact is that we have their back
in the fight to protect work and jurisdiction; their fight is our fight,” he said.
RAMPING UP
For their part, service providers are
starting to listen to their customers, and they are also starting
to stir. APL Logistics, the third-party logistics unit of shipping
giant APL, is gearing up its decon-solidation capabilities along the
West Coast to accommodate any
surge in imports, according to
Tony Zasimovich, the company’s
vice president of international
services.
Zasimovich added that APL
Logistics will prepare to deploy
more team-driver truck capacity to
get goods inland and will ensure
space is available for its “Ocean
Guaranteed” service, which, as its
name implies, guarantees deliveries
from Asia to all continental U.S.
points served by its trucking part-
ner Con-way Freight, the less-than-
truckload arm of Con-way Inc. The
service is available for less-than-
containerload and full-container-
load traffic, albeit at a higher price
than an all-water service.
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