Pacific Maritime Magazine - Marine Business for the Operations Sector

Lunch is Served


A competitor aggressively pursuing another's market share can be colloquially said to be 'eating his competitor's lunch.' A good example can be found in a recent report from online trade information provider Zepol (, which shows a dramatic shift in containerized cargo from Pacific to Gulf Coast and Atlantic ports in the first half of 2015:

"Zepol found that a hefty chunk of businesses have switched from using Pacific to Atlantic and Gulf ports this year. Total imports along the East Coast have increased by 15 percent, while import traffic on the west coast is down

4 percent."

Several factors may account for this shift, but according to the report, imports from China along the west coast declined by 3 percent, while Chinese imports on the East Coast continue to rise, with Chinese container shipments to Atlantic ports having increased by

20 percent this year. Gulf ports have seen a more dramatic 43 percent increase.

Zepol's CEO Paul Rasmussen notes, "Shipments are setting sail for Eastern ports even before the Panama Canal expansion is complete. Shippers may be tired of west coast backups, and with carriers adding more lines from Asia to the East Coast, it's hard to blame them."

The west coast backups cited by Rasmussen are due in no small part to contentious negotiations between labor, represented by the International Longshore and Warehouse Union (ILWU) and management, represented by the Pacific Maritime Association. The divisive negotiations are a regular occurrence on the US west coast, and ILWU President Robert McEllrath says this year were "some of the longest and most difficult in our recent history."

The Zepol report notes that the ports of Newark/New York, Savannah, and Houston had the highest increase in imports for the first half of 2015 (compared with the same time in 2014). The Port of Newark/New York increased in imports by 12 percent, Savannah rose by 32 percent, and Houston by another 26 percent. The port of Houston also had a surge in containers from China. The port brought in 53 percent more Chinese containers already this year. Rasmussen says the port of Newark/New York's imports are becoming competitive with those of Long Beach.

While the west coast is still smarting from its nearly year-long negotiation, the United States Maritime Alliance (USMX), which represents employers on the East and Gulf Coast longshore industry, and the International Longshoremen's Association (ILA), recently completed what is being reported as two days of productive exploratory talks on extending the current Master Contract in advance of full wage scale meetings in mid-September, 2015.

In a joint statement, the ILA president and USMX CEO said they were ready to move forward on talks aimed at extending by up to seven years the current ILA-UMX Master Contract, which runs until September 2018.

"The ILA and USMX are committed to keeping commerce moving at United States Eastern and Gulf Coast ports and we think this extension will achieve that goal."

We think so, too, and hope the PMA and ILWU are paying attention. If not, both might be pretty hungry by 2017.


Powered by ROAR Online Publication Software from Lions Light Corporation
© Copyright 2020

Rendered 10/28/2020 08:16