There is considerable and understandable concern within the trade community regarding the current West Coast trade disruptions, and the resulting delays and diversions of vessel cargo arriving and departing from West Coast ports.
The International Longshore and Warehouse Union and Pacific Maritime Association have been in negotiations since May 12, 2014 over a new West Coast longshore labor contract. The current six year labor contract expired at midnight on June 30, 2014 so the ILWA and PMA have been working to renew labor contracts by reaching an agreement on a new contract.
Back in June of this year we wrote a blog article regarding possible contingency plans that importers and exporters might consider in mitigating the disruptions that a Longshore strike could cause. While a strike has not yet been called, and negotiations are continuing, we are ever aware of the growing disruptions and delays currently happening at all major West Coast ports. Now might be a good time to review some of the alternative options, as there does not seem to be a projected return to normalcy in this matter, and it may get worse before it gets better. A strike is not yet ruled out of the realm of possibility.
Particularly because there is no way to know when this situation might resolve, we suggest that you consider the options that we've put forward here, in addition to working with your overseas partners for minimizing disruptions as much as possible.
In addition to our suggested options reiterated below, U.S. Customs and Border Protection in Seattle has issued a Trade Information Notice updating the procedures that are available and to be taken in relation to the port congestion, particularly in regards to diversion of vessels.
The various scenarios outlined in the Trade Information Notice include:
- Vessel Diverted to Foreign Port and Discharged
- Vessel Diverted to Foreign Port Not Discharged
- Vessel Diverted to Another West Coast Port and Discharged
- Vessel Diverted to Another U.S. Port Not Discharged
- Vessel Diverted from Intended West Coast Port to Gulf or East Coast for Discharge
- Vessel Rests at Anchor and Not Diverted
U.S. Customs and Border Protection will continue to disseminate information as it becomes available. In addition, U.S. Customs has clarified that members of C-TPAT will experience "front-of-line privileges" upon resumption of normal business practices. To the extent possible and practicable the containers can be moved ahead of any non C-TPAT shipments awaiting exam, regardless of how long they have been there.
Alternative Steps In Dealing With The Severe West Coast Port Congestion:
As a majority of imported retail goods are shipped through West Coast terminals and gates, a successful contract negotiation is of critical interest to all in the supply chain. It is now clear that a new agreement will not be reached without considerable disruption, having a contingency plan in place in case of a strike, lockout or long-term disruption will help your business mitigate inevitable supply chain disruptions. Below are some alternative steps you could take to safeguard your shipments.
- Scope your alternatives - Develop a backup plan with an experienced logistics provider to ensure the proper flow of merchandise.
- Choose alternate port routings - Look at routing shipments to Canadian and East Coast ports not affected by these activities.
- Consider moving products via sea-ground options and/or air freight to minimize the impact of increased costs. Air might be a good choice for critical time-sensitive products.
- Transload, truck, and intermodal - Be prepared to consider multiple means of transportation, utilizing truck and intermodal as needed to keep products moving.
- Prepare for likely delays and stoppages at the ports as the disruptions and diversions continue.
- Stay updated on the status of the negotiations - Pacific Customs Brokers is monitoring the situation and will continue to post updates to the Trade News section of our website as they become available.
How Pacific Customs Brokers Can Help
Additionally, our affiliated companies Pacific Overseas Forwarding and PCB Sufferance Warehouse can help you devise a customized backup plan. We offer solutions from cross docking and clearing your goods to transporting them down to your North American destination. U.S. exporters might look to use our bonded warehouse as a destination to ship overseas bound cargo for container loading. Contact us to learn how one of our logistics specialists can help you prepare your contingency plan.