With ports on the west coast of the United States currently suffering from chronic congestion, are there deeper issues affecting their performance? A new report by Drewry seeks to answer such a question.
The new report compares capacity and performance benchmarks for 500 terminals worldwide in order to explain some of the underlying factors hindering ports in North America.
The well-documented severe congestion currently affecting US west coast ports is a consequence of a "perfect storm" of factors working together, said Drewry.
"The situation has now deteriorated to the point of mud slinging between the employers (PMA) and the union (ILWU). Major carriers have had enough and are imposing congestion surcharges of up to US$1,000 per FEU for cargo moving through US west coast ports."
The troubles have prompted cargo owners and forwarders to write to President Obama suggesting that "a full shutdown of every west coast port may be imminent", seeking federal mediation and if necessary the invoking of the Taft-Hartley Act in the event of a total closure, continued Drewry.
The Act would force labour back to work and was last used in the ports by President George W. Bush in 2002 after a 10-day shutdown.
"The stakes are high. The US west coast lockout 12 years ago cost the US economy an estimated US$1.0 billion a day and took six months for the ports to clear the backlog," said Drewry.
"A recent study commissioned by the National Association of Manufacturers and the National Retail Federation estimated the potential cost to the US economy of a west coast port shutdown has more than doubled since 2002 to as much as US$2.5 billion per day if it were to last 20 days."
