Philippine shippers are closely watching developments in US West Coast ports, which shut down from Feb 12 to 16 due to a labor dispute, fearing that any worsening of the situation could affect trade between the Philippines and the US at a time when congestion at Manila ports has yet to be solved completely.
Ports in the US Western seaboard have been experiencing congestion for the past nine months due to management and labor issues that led to work slowdowns and stoppages by members of the International Longshore and Warehouse Union (ILWU).
The Pacific Maritime Association (PMA), an association representing shipping lines, and ILWU, which represents labor unions in 30 ports in the West Coast, have been locked in contentious contract talks since May 2014. This has led PMA to announce a four-day stoppage of vessel operations at 29 West Coast ports from Feb 12 to 16. As of February 16, 34 vessels were waiting to berth at ports of Los Angeles and Long Beach, California, the US’s busiest cargo hubs.
Ma. Flordeliza Leong, assistant vice president for advocacy and communications of the Philippine Exporters Confederation, Inc. (Philexport), told PortCalls in a text message there no reports yet from their members of any effects of the congestion in US ports.
However, she noted that if the situation persists, “costs can go up again to move cargoes by air or through a longer route. There can even be cancellations which we do not want, especially that it’s not our (exporters) fault,” Leong said, adding it’s “good it’s not the peak season.”
The US is the Philippines’ second top export destination and second top source of imports.
Patrick Ronas, president of the Association of International Shipping Lines (AISL), also told PortCalls in a text message it’s “too early to tell” the effects to Philippine shipments.
But if the situation continues, he said, imports from the US will be more expensive plus there will be delays in delivery.
Cargoes from West Coast may be moved to the East Coast but Ronas said this will entail again entail additional cost since US East Coast ports are an “all-water service so transit time is longer.”
Another shipping line executive who requested anonymity told PortCalls they already have stopped accepting cargoes to Oakland and all inland points in US via Vancouver. He noted that if the situation at US ports “goes out of control”, it will have a deep impact on Philippine imports and exports.
The effects of the congestion have been felt across the US economy, and have expanded to the agriculture, manufacturing, retail and transportation sectors. Nearly half of all US maritime trade and more than 70% of imports from Asia are handled by the affected West Coast ports. US President Barack Obama has ordered Labor Secretary Tom Perez to meet with ILWU and PMA on Feb 17 to settle the issue.
According to the Office of the United States Trade Representative website, Asian exporters are also faced with increasing shipping rates and some have been forced to reroute their goods air freight, which is costlier.
Japanese automaker Honda Motor Co., in a statement, said it would slow production for a week at plants in Ohio, Indiana and the Canadian province of Ontario, because of port-related delays in parts shipments to those factories. Another automaker, Toyota Motor Corp., said it has reduced overtime at some of its factories while Nissan Motor Co. Ltd. said it has been slightly affected. – Roumina Pablo
