BDP SURVEY: SHIPPERS MAKE CONTINGENCY PLANS FOR WEST COAST SHIPMENTS
U.S. shippers are making contingency plans to deal with additional service disruptions if a settlement of the West Coast ports dispute should be delayed, according to a survey commissioned by BDP International.
BDP, a logistics and transportation services company based in Philadelphia, and its Centrx supply chain consulting unit commissioned the survey, conducted by Adler Research between Oct. 24-30.
While the Pacific Maritime Association and the International Longshore & Warehouse Union, reached a tentative agreement on technology issues — considered the key points of conflict in negotiations — nearly 63 percent of logistics managers interviewed said they were not optimistic about a time settlement. About 53 percent favored extending the Taft-Hartley cooling-off period, imposed on Oct. 9, beyond its 80-day limit.
On Tuesday, federal mediators ordered a one-week break in talks after PMA and ILWU negotiators dealt with pension provisions.
Among contingency concepts cited by the survey’s respondents, supply chain managers favored cargo diversions to East Coast ports, by 52 percent; increases in safety stocks, 34 percent; alternate sourcing, 29 percent, and diversions to Gulf Coast ports, 29 percent.
Interestingly enough, 63 percent of respondents said the West Coast port shutdown had not been expected. Those shippers anticipated long-term changes in supply chain management so they would not be taken by surprise again. Yet 44 percent of the survey’s respondents reported having contingency plans in place before the ports shutdown.
Not all of the advanced planning was adequate for what subsequently happened. “We were prepared for a number of two- or three-day closures that would cause one-week or two-week backlogs,” said one shipper. “We did not expect a two-week closure that would cause a month-plus backlog.”
An importer said, “one product line was unable to ship for the month of October because it was sitting on a boat waiting to be unloaded. This hurt the company and its customers.”