Cargo Business Newswire

Thursday, June 26, 2014

Top Story

U.S. importers stocking up in case of West Coast labor disruption

Importers in the U.S. are building up stock to offset a possible West Coast labor disruption at the ports once the current contract expires July 1, according to the most recent issue of Container Insight by Drewry Maritime Research.

Drewry reports that Asian cargo imported through the West Coast of North America surged by 13 percent in March at 884,000 TEUs, and then on to 1,021,000 TEUs in April.

Most of the westbound volume increase in March was normal, since China’s factories were closed the first two weeks of February and ordering after the holiday is typically heavier, researchers said. Growth in 1Q 14 was 4 percent year-over-year.

Drewry’s analysts found April’s climb in cargo volume to be more surprising, noting that U.S. importers have been stockpiling more goods than usual in preparation for possible strike action in USWC ports at the end of June.

Contract talks between the International Longshore and Warehouse Union, which represents the dockworkers, and the Pacific Maritime Association, which represents the employers, are still said to be delicate, Drewry notes, with the contract expiring on 30 June.

Container carriers shifted in response to the cargo increase, reducing sailing cancellations, bringing back services withdrawn over the winter period, and revising alliance structures, the report said.

Drewry said because most of the current cargo surge from Asia to the West Coast of North America is only due to the threat of strike action in USWC ports after 30 June, so there is an expectation that third quarter imports will be correspondingly less, whether there’s a strike or not. The report said since this will be during the peak season, average vessel use will likely remain healthy through Q3.