The slowdown at West Coast ports is taking a toll on U.S. commerce, but not only for the produce suppliers whose fruits and vegetables are rotting inside idle shipping containers or the retailers whose delayed goods are garnering headlines because of the holiday season.
Distributors and manufacturers are also being disrupted by this giant kink in the global supply chain. Stalled contract talks between shipping lines and longshoremen are holding up Pacific Rim imports at docks from Tacoma, WA, to Long Beach, CA.
The Pacific Maritime Association, which represents West Coast port operators, claims the Longshoremen Workers Union is deliberately slacking on unloading containers from ships that arrive from Asia. The union attributes the slowdown to increased volume and dock equipment shortage. Whoever or whatever is to blame, the end result is disastrous for businesses that need those cargo containers quickly loaded onto eastbound trains.
Andy Mitchell, director of supply chain and marketing at jan-san and safety equipment distributor CCP Industries, which imports 80 to 100 containers each month from China and Malaysia, said the company has been experiencing delays of two to four weeks because of the slowdown.
"It has been very challenging on our supply chain, causing back orders and increased investment in inventory levels," says Mitchell, who worries that the disruption could have a devastating and lasting effect nationally. "Shipping lines were expecting things to improve in October 2014 and they did not. And with an improved U.S. economy forecast for 2015 and continued tight capacity, there is no light at the end of the tunnel."
Bill Childers, president of bearing manufacturer C&U Americas, Plymouth, MI, said the port slowdown is causing major headaches for his company, which imports a couple of containers a week into Long Beach. So far, however, Childers says the problem is about time rather than money, and careful inventory planning is critical.
"It's probably the most painful thing we're facing right now," Childers says. "It's costing a week or two for every shipment. What it means is we've got to order further and further ahead and allow for more of these delays. It ends up inflating our inventory."
Childers says it doesn't make sense to ship to other ports, like those on the Gulf or East coasts, because not only would that add the same amount of time the West Coast delays are already causing, but it would add shipping costs. The only real hope is a labor agreement; both sides are back at the bargaining table Monday, Dec. 15. Look for updates at www.mdm.com.