At Puget Sound ports, shippers say slowdown damage is already done

Sarah Aitchison, December 3, 2014, Puget Sound Business Journal

Even if ports started up today at normal productivity business would still likely be lost, according to shippers in the industry.

Peter Friedmann, executive director of the Agriculture Transportation Coalition said at an event last week that businesses and trade organizations seems focused on how port congestion is affecting this holiday season.

But he’s more concerned about the next 12 seasons.

Negotiations between the Pacific Maritime Association, the managing authority of ports along the West Coast, and the International Longshoreman and Warehouse Union have been slow and frustrated over the last month.

The ILWU’s labor contract expired on July 1. They have been working without a contract since.

And now the ports are slower than normal. The union blames major changes in the industry, the PMA blames the union.

But regardless of who is right, for many shippers the damage has already been done.

Blaine Calaway, vice president of China sales for Calaway Trading Inc., said if the problem was solved last week. Calaway Trading would still be two-to-three months behind fulfilling current contracts.

But in all likelihood, some of those contracts would be canceled anyway and that business lost.

Bob Ashumn, of the National Frozen Foods Corporation, said his company sends a lot of its business to Japan. He said customers don’t need to purchase goods from him. They could find the same products in Thailand, New Zealand and Australia instead.

In 2002, West Coast ports shut down for 10 days as a result of sour labor negotiations. The United States economy lost $1 billion a day.

At that time, almonds from California were exported to Japan, India and China.

Between 2000 and 2005, almond exports to those three countries dropped, according to a study by Blue Diamond Almonds.

Friedmann said that’s because, at the time, some companies began importing almonds from different countries and never returned to the U.S. export industry.

“Our customers are losing confidence in our product,” said Bob Haberman of No. 9 Hay LLC, a hay exporting company.

Joey Stivala, of import/export company MacMillian-Piper, said his business was on track after the first three quarters to have the most profitable year ever.

“Then Halloween came and the ports came to a screeching halt,” he said.

Stivala said, in the best-case scenario, the company would still need two to three months to catch up.

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