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U.S. West Coast Port “Slowdown” Affecting Fastener Delivery

2015-03-13  |  Author : John Wolz, Editor of FIN  |  Class : 美洲新聞
Many are talking about the “slowdown” and possible imminent strike at West Coast ports, but Bill Giddins of Continental-Aero has numbers to show what is already happening. Contract talks between the 29 U.S. West Coast ports and dockworkers’ union, which handle 70% of imports from Asia, could move from a slowdown to a full strike. Union leaders say management claims that port shutdowns are approaching are a negotiation tactic and contract talks – which include a federal mediator – will find a solution to wage, pension and arbitration issues. Management says union work slowdowns by 20,000 dockworkers are intended to gain bargaining leverage. The labor situation began affecting the fastener industry during summer of 2014. “The average length of time from Asian ports to one of our warehouses – not just total shipping time – was 3 1/2 weeks,” Giddins told GlobalFastenerNews.com. “Now it is running anywhere from six to seven-plus weeks. Certain shipments get shunted to the side and can linger even longer. We have one container outstanding since December 3, 2014.” Not only are containers slower to arrive, but Peggy Hsieh of Brighton-Best International pointed out that “getting new containers booked in Asia is a challenge due to lack of containers going back in a timely manner.” “Like everyone else, we are also feeling a port slowdown,” Hsieh said. In early February, Pacific Maritime Association president James McKenna told Bloomberg News that “union-led slowdowns could shut down the 29 U.S. West Coast ports.” A slowdown has port production “down by as much as half” in some locations, McKenna said. McKenna called on the International Longshore & Warehous Union to accept port management’s second contract proposal. That offer includes about a 3% annual pay raise, continuing paid health care and increasing maximum pensions by 11.1% to $88,000 annually. Labor union spokesperson Craig Merrilees termed the negotiations “very close to a resolution.” The slowdown began last summer, Beacon Fasteners national sales manager Kameron Dorsey said. “This has been an ongoing situation since the summer, but has increasingly gotten worse.” “Different companies have employed different procurement strategies – increasing buys, rerouting to alternate ports, etc. – in anticipation, but combined with the plating situation in Taiwan plus the U.S. demand it is hard to keep inventories at proper levels.” Plating costs jumped 37% in January, Giddins reported. Giddins sees the strike as a possible solution. “We think a strike may be the only way for this situation to come to a head as the current situation is not sustainable,” the Continental-Aero president observed. But with the U.S. economy being “very robust” and “certain segments gaining momentum, a long-term strike would have a devastating effect and change the current business paradigm,” Giddins suggested. “The ripple effect is already being felt as the ports are charging increased fees and air cargo space is being taken at unprecedented levels and is at a premium,” Giddins finds. “A strike would not initially present a problem, but depends on how long a strike would last,” Tom Bigott, purchasing manager for XL Screw Corporation, told GlobalFastenerNews.com. Industry has been feeling the slowdown which “has been steadily growing since July.” XL Screw is currently experiencing a two-to-three week delay on containers arriving at warehouses. Continental-Aero increased its planned inventory levels starting in October in anticipation of problems, Giddins said. “This has helped to overcome the later delivery; however, spot shortages have become evident.” Brighton-Best is already see the “slowdown affect fastener supply especially with those wholesalers who live on minimal inventory,” Hsieh observed. “Owing to our large on-hand inventory position, we have had few issues supplying our customers.” BBI has “not seen our customers need to increase inventory significantly” as the master distributor still has most of what customers need.

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