There are now more than 150 container ships slowly bobbing off the West Coast, going nowhere in a hurry. Farther out at sea, eighteen container ships have changed course, reports the Los Angeles Times, looking for alternative locations in Mexico and Canada to off load their cargoes.
Why are all West Coast cargo ports closed? According to the Times, The Pacific Maritime Association shut them down Sunday, saying work slowdowns by the International Longshore And Warehouse Union amounted to a “strike with pay” and that it was cheaper to close the ports than to operate them under those conditions.
The work slowdowns were prompted by the proposed implementation of a new computerized bar-coding system. The union wants any jobs created by these new systems to fall under their jurisdiction.
In the grand scheme of things the stakes are huge. More than 309-billion dollars’ worth of goods flow through West Coast ports, which serve as the import/export gateway to the rest of the Pacific Rim. According to the New York Times, a five-day shutdown will cost the U.S. economy about five-billion dollars. A ten-day shutdown will cost twenty-billion.
The surf industry, which is dependent on shipments from Asia for almost all of its apparel and footwear, is also exposed to the effects of the lockout. According to one apparel manufacturer, the backlog created by the lockout is a prime concern: “For every day the ports are closed, we are expecting a five-day backlog. If the lockout continues for much longer, I foresee a shortage of product beginning around Thanksgiving.”
A VP of operations at another apparel company says he currently has product floating out of reach in the harbor. “We’re on the edge of our seats until Monday.” He says the company is prepared to ship its goods by freight air, if needed. That will double the shipping costs and make a huge negative impact on margins. “But we haven’t hit the panic button yet,” he says.
Another surf-industry leader says he was expecting to take delivery of a shipment of goods in about nine days, but was looking at rerouting the delivery though Ensenada, which is capable of handling smaller ships, but not the huge container haulers that are the backbone of Pacific Rim trade.
TransWorld SURF Business will update this story as it develops.