The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) are into their sixth month of negotiations for a new contract. The contract between these two parties expired on July 1, 2014. This new contract covers nearly 13,600 workers at 29 ports along the west coast. Ports are showing signs of ‘slowdowns’ which are causing massive congestion and continue to worsen each day. These conditions, along with the ILWU and PMA failure to come to an agreement to finalize a new contract or implement an extension of their existing contract, lead us to believe that port closures may be looming.
As a result, NVOCC’s have announced their port congestion surcharges are effective on all export shipments sailing on or after November 17, 2014. They are offering contingency routings for U.S. export cargo to overseas destinations via East Coast ports. All alternate routings are subject to vessel/truck/rail availability. Steamship lines have also sent out notice their port congestion surcharges on imported cargo are effective on all cargo arriving on or after today, November 18, 2014. These surcharges will remain in effect until further notice.
There are major issues that are still unresolved. In addition to port congestion, there will be increased transportation costs due to the amount of time and issues involved in recovering equipment and cargo. The delays in recovering equipment and cargo are leading to increased demurrage and detention charges. Importers and exporters need to be aware and plan for these increased charges as the terminals and carriers are not waiving these charges.
We will continue to closely monitor this situation and will update you with the latest information as it becomes available. Should you have more questions or concerns about how this will affect you and your cargo, please contact our office today.