The No. 1 desire of retail and consumer goods shippers is to manage their trade lanes to achieve a predictable outcome. This means that shippers must get a resolution to today’s problems of port congestion, excessive dwell and labor delays by a variety of means. But ocean carrier pricing will keep them “short of” shifting their international freight routes to ports outside of the West Coast.
Shippers will work diligently with their partners to fix those key West Coast issues. Some may even reward the ports that offer balanced throughput and access by both rail and truck to multiple inland logistics destinations, a share of their “throughput.” Until pricing in all-water services becomes more relaxed compared to West Coast and intermodal IPI rates, we cannot and will not see a shift in Asia inbound container trade from West Coast ports to East Coast ports.
West Coast port labor and employers must face up to the reality that more alternatives will seek and successfully obtain single-digit market share away from them, if these congestion issues are not ironed out. This should not be a repeat of 2002-2004, when a huge 7 to 10 percent shift occurred and launched the East Coast ports’ double-digit growth, and solidified the decision by the Panamanians to upgrade their canal. This next year will be about managing specific sets of issues between terminals, truckers, technology and labor.
Looking to the Gulf Coast labor situation as a model could yield some insights into how ILA Labor and management work together to create a synergy not found on any other waterfront in the U.S. In the Gulf, men and women sit down together with the common goal of: “We have to work out these differences, with each side giving, each side compromising and each side thinking outside the box.”
Perhaps it was that Texas and many other Gulf states are right to work states? Perhaps it was the realization that freight is fickle? Regardless, those same entities, from different sides of the equation, have worked for decades now in a strike-free, slowdown free, lock-out free environment. West Coast stakeholders — take note!
Curtis Spencer, President, IMS Worldwide