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Most in the trucking and shipping industry have been keeping track of the recent labor disputes that have plagued the West Coast’s ports.
For months, the conflict between the International Longshore and Warehouse Union and the Pacific Maritime Association caused insurmountable amounts of congestion at some of the busiest American ports for international trade and commerce. Recently, however, the conflict has ended, and the 20,000 protesting workers along the West Coast have returned to work under a tentative five-year contract, CNN reports.
Although the two sides have come to terms, and the port workers are back on the job, their long-lasting dispute may have irreversibly changed the landscape of American shipping, trucking, and freighting.
Because the West Coast was virtually useless as a recipient of foreign merchandise, cargo-carriers had to find new destinations to land and conduct their business. Thus, Eastern, Southern, and Gulf ports saw a huge increase of business in January and February. For instance, the Journal of Commerce (JOC) reports that in January 2015, the Port of New York and New Jersey was 7.8% busier than it was in January 2014. Ports in Virginia and the states along the Gulf of Mexico are also booming as a result of the West Coast congestion.
What is interesting is that even though the West has returned to being fully operational, it does not appear that companies and businesses are looking to immediately return to their traditional trade routes. A recent JOC survey of 138 shippers revealed that 65% of them plan to ship less cargo through the American West Coast in 2015 and 2016, the Wall Street Journal reports.
Naturally, this reshaping of American trade has an immense impact on the trucking and freighting industry.
For those on the West Coast, this new trend spells bad news. The ports that keep them busy are seeing significantly less cargo brought in each day. The Port of Oakland, for instance, saw a 32% drop in volume amidst the labor strikes, says the Wall Street Journal. With less cargo to move, truckers and shippers will have less business. Obviously, less business is never a welcomed phenomenon.
For those on the East Coast, however, the ramifications of the labor dispute are entirely positive, as their ports, and consequentially their respective businesses, are booming. They have more cargo to haul from point A to point B, and luckily for them, many plan coming back to the East for at least a year or two.
There are several speculations as to how long it will take for the import/export volume to return to normal levels on the West Coast. Some forecast that it will only take a matter of six months, while others predict that years will be needed in order for them to return to normalcy.
