After reporting that dock workers at the Port of Houston have reached a new contract late last year, it looks like port operators on the east coast have also reached a tentative contract.
What this does is prevent interruptions in both container loading and unloading at major east coast ports. We have listed what can occur if the tentative contract is not approved by members.
Loaded containers will sit idle at ports if an agreement is not reached. While the containers are waiting to be loaded and unloaded, shipping lines will charge storage fees. Customers will pay more for a strike that they are caught in the middle of any port strike. Loaded containers at the ports with strikes can be charged a $1000 “congestion fee”. This is basically a payment for containers to sit on ships or in the docks while they are waiting to enter or exit a port. The ships still have expenses while their personnel wait for loading or unloading of containers. Think food, gas, and payroll expenses.
Ships waiting to load cargo may have to wait it out at the port so that they do not leave with empty loads. The charges they incur would be sure to drive up shipping prices. While some companies may be able to ship items via air, this is an expensive alternative. Larger items and chemicals may not have an air option available to them. Consumers in a recovering economy would not want to pay additional costs. Some business would have no choice but to air freight items that are necessary for production.
The Port of Houston workers did not strike before the ever important holiday season. The east coast workers have saved both Valentine’s Day and the Easter Season. If products had to be rerouted to ports that were not striking, consumer goods prices would have risen. These rerouted items would need to be shipped over land to their final destinations. Think clothing, TV’s, snow removal equipment, shoes and flowers. Many extra expenses would have been incurred when shipments were shipped over land.
If the ports do get congested with ships, it will take longer to unload and sort all of the shipments. There was the possibility of goods taking longer to clear customs. The staffing would have the same, but there would have been many more containers to sort through at one time.
There was a concern that the strike would have occurred in parts. The ports would probably have continued to process both food and ships that carry passengers and automobiles that were loaded as roll on, roll off. The cares that were shipped in containers would have still been delayed. These non contanerized items would not be affected as far as unloading. Even while trying to unload the cars and passenger ships, there may have been delays in the ports due to back up congestions. Passengers on ships are often in a hurry to depart in order to catch a plane to their final destination. Not only would port business be affected, but rental car and airline traffic would also have been affected.
These settlements are wonderful news for the economy in general, but also for families that rely on wages to meet monthly bills. With the economy still in a slow recovery mode, port strikes could affect many business and families in a negative manner.
While pack n send is located in Houston, TX we do ship out of both east coast ports, west coast ports, and of course we ship through the Port of Houston. With both coasts and the Port of Houston settling contracts this year, it should make for much smoother shipping in the coming year.