As if the supply chain hasn’t been constrained enough since 2020, another wrench thrown into the mix has many importers and shippers in the fashion and retail industry concerned that more goods will be stuck at ports—putting the upcoming back-to-school and holiday seasons in jeopardy.
Labor contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) expired July 1 without an extension, potentially impacting an already compounding glut of products in West Coast ports. Although the ILWU and PMA have said that cargo operations will continue without a work stoppage after the contract expiration, it doesn’t guarantee a deal will be reached immediately, nor prevent more bottlenecks from taking place. In fact, not having an agreement in place imperils the situation further because there is now no governing body to keep the multitude of union factions together, and that means smaller elements can stage a walkout, slowdown or strike on their own.
With uncertainty likely remaining the norm, shippers must use different solutions to ensure that their goods don’t get held up on the West Coast for weeks on end. OEC Group, a freight forwarder that offers services across ocean, air, over the road, and customs brokerage, has been actively advising its clients to seek out and route products to alternative ports, particularly away from the West Coast, because this insures minimum delay and that companies will have their products in the marketplace rather than on a container vessel.
“Alternate routes away from the U.S. West Coast are pivotal, as the labor contract situations extend well beyond the Ports of Los Angeles and Long Beach,” said Peter Hsieh, vice president of sales and marketing for OEC Group. “The ILWU represents more than 22,000 dockworkers at 29 West Coast ports, including Seattle, Oakland, and Vancouver. More product from East Asia comes through the West Coast than anywhere else in the United States. Avoiding these ports means clients will having their goods in time for the busiest shopping seasons.”
OEC believes it has a distinct advantage in helping clients make these decisions due to its agility within the freight spot market. OEC can use its carrier relationships to give shippers a wider range of shipping options, as well as assist in finding and scheduling equipment and last-mile delivery.
“The most important thing shippers need to have, is flexibility,” said Frank Costa, vice president of sales for OEC Group’s New York office. “What we have seen with our fashion industry clients is that those who are open to and use alternative routing options will see their products on store shelves significantly faster than those who continue to stay the course.”
Importers are starting to heed OEC Group’s advice. The June 2022 Global Port Tracker from the National Retail Federation (NRF) and Hackett Associates revealed that more shippers are in fact rerouting to the U.S. East and Gulf Coasts. On a year-over-year basis, import volume to East Coast ports like N.Y./N.J.; Charleston, S.C.; Savannah, Ga.; and others increased 12.2 percent in April 2022. The Port of Houston has seen these shipments increase 26.5 percent in that same time frame. As a result, shippers should not waste any more time securing space to alternative ports.
“Any shipper that is interested in shipping directly to the East Coast must start scheduling right now, as carrier allotments are pretty well booked,” said Mr. Costa. “However, there are other significant cross border and air fright options available, but for those options you definitely need to enlist the help of an experienced forwarder.”
Learn more about OEC Group here.