Container Shipping Takes $150m Hit


Container shipping lines are said to have incurred an estimated loss of US$150 million as a result of the recent US West Coast (USWC) port dispute that saw around 27 ports closed during a clash between the International Longshore Workers Union and the Pacific Maritime Association over labour contracts.

Ports may also be affected due to the massive backlog of containers that accumulated during the closure and because much of the container trade that was coming through the USWC had been diverted to the US East Coast via the Suez Canal.

As reported by the Loadstar, Drewry shipping consultants commented that “carriers should be more open with the associated costs, especially as many customers will think that the issue has now been resolved.”

The environment also took a hit from the USWC port shutdown while docked at the Port of Long Beach, a controversial topic since Long Beach is renowned for environmental innovation.

Neil Davidson, Senior Analyst of Ports and Terminals at Drewry, concluded that “one of the most telling stats is when you put the cost of congestion in persepctive – the fact that the annualised cost of the USWC congestion would buy 60 gantry cranes or pay for 2 million teu of new capacity. And that's just the cost borne by the shipping lines. It doesn't include costs borne by other parties. And it's also only the LA/LB costs for shipping lines… doesn't cover all the USWC ports.

“The other thing to remember is that even without the labour dispute, there were still (and still are) issues causing delays and extra costs: peaks caused by bigger ships and lower service frequency, effect of alliances, chassis shortages and truck driver shortages for example.

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