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Shippers Hunt for Port Options Ahead of Looming Labor Talks

Companies looking to get out ahead of any potential West Coast dockworker disruption will have to weigh their alternatives carefully as other ports grapple with increasing congestion and wait times.

That’s the word from Everstream Analytics, a company that helps shippers analyze risks to their supply chain through the analysis of millions of data points. The company on Wednesday outlined alternative route options shippers could use in the event of a partial or full-on strike should dockworkers and terminal operators not be able to agree on a new contract by July 1, when the current one expires.

The parties involved in those talks are the International Longshore and Warehouse Union (ILWU), which counts about 29,000 members across 29 ports along the West Coast, and the Pacific Maritime Association (PMA), representing some 70 terminal operators.

While there’s been plenty of talk about moves to the East and Gulf coasts, along with Canada, in preparation for potential disruption, there’s likely no escaping congestion.

“Congestion has been increasing on the East Coast if you compare early- to mid-February at one of the biggest ports,” said Everstream director of intelligence solutions Mark Woitzik.

He cited the Port of Charleston, where roughly 25 container ships are waiting to berth. The average wait time ranges from 10 to 16 days. That compares to eight-and-a-half days in the middle of February and seven-and-a-half days in early February.

“So, you already see that there is a big push [for port alternatives]. Customers have reacted to this six weeks ago and this is clearly being shown in the number of vessels arriving and kind of overwhelming the port already,” Woitzik said.

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The other potential East Coast risks include rail and chassis constraints.

Other alternative port options are in Mexico, which would face its own congestion challenges if there was a surge in volume, amid the continued risk of cargo theft and potential for rail disruptions. Meanwhile, Canada could offer a buffer for shippers, but congestion there should also be weighed.

There’s also the Gulf Coast ports, such as Tampa or Houston. However, Everstream said shippers should take note of hurricane season timing and elements such as fog that could cause their own set of delays. Houston is also what’s considered a break-bulk port, meaning cargo arriving on ship is not typically in containers. Los Angeles and Long Beach, in contrast, are known for their handling of containers.

Ocean carriers have responded to the potential customer demand for alternative routes. However, given the uncertainty about which way the labor contract talks could go, there hasn’t been a surge in additional offerings to the East Coast or other port options outside the West Coast, according to Everstream Intelligence Solutions analyst Anthony Yanchuk.

However, Yanchuk confirmed Everstream has noted an uptick in expressions of interest from customers wanting to move to alternative ports than what’s been seen in the past.

The big question is can those alternate ports handle the increased volume?

Woitzik said 12 months ago the industry got a glimpse of what happens when shippers divert cargo to other West Coast ports, such as Oakland and Seattle.

Oakland’s less than a day-long wait bumped to 20 days because the port was overwhelmed by the influx of cargo amid a labor shortage.

The case could be made that is likely to occur on the East and Gulf coast ports, Woitzik said.

“All of these ports might not be in a position where they can take a lot of these re-routed ships. Maybe to handle one or two, but if there’s something arriving out of schedule, it would quickly overwhelm the port,” he said.

If there are any bright spots for shippers in search of backup options, Mobile, New Orleans and Baltimore could potentially handle increased volumes. Miami is another promising option with its current 24-hour wait times, Yanchuk pointed out.