Shippers prepare for port strikePublished 8:49pm Saturday, September 8, 2012
As a longshoremen strike threatens to bring port facilities in Hampton Roads to a standstill, Suffolk-based shippers are monitoring proceedings and contingency planning.
Last week, wage negotiations between the International Longshoreman’s Association, which represents longshoremen on the East Coast and elsewhere, and the United States Maritime Alliance reportedly ended without a deal.
This week, Federal Mediation and Conciliation Service Director George H. Cohen issued a statement that both parties have agreed to resume mediated negotiations during the week of Sep. 17, offering some hope of resolution.
“Due to the sensitivity of this high-profile dispute and consistent with the agency’s longstanding practice, we will not disclose either the location of the meeting or the content of the substantive negotiations that will take place,” the statement read.
The ILA has not said whether the resumption of negotiation means members will abandon plans to begin a strike on Oct. 1.
In recent years, ramping up since the Port of Virginia announced plans to expand facilities in Hampton Roads to capitalize on a Panama Canal upgrade, importers and exporters have increasingly located distribution hubs in Suffolk.
Target is one of the largest companies to include Suffolk in its logistics network; spokeswoman Molly Snyder said of the threat of strike, “Certainly we’re aware of the situation and closely monitoring it. Well-defined contingency plans are in place.”
She declined to give specifics.
Georgia-headquartered Coastal Logistics Group, a third-party warehouse company, recently announced plans to expand its class A warehouse facility located on College Drive from 74,000 square feet to 129,000 square feet.
CLG Sales and Marketing Coordinator Michelle Gravine said about 30 clients, including importers, exporters and freight forwarders, are serviced by the Suffolk facility.
The company also has locations in Savannah, Ga., and Memphis, Tenn.
“If we get a worse-case scenario, and we have to get something out, we can ship to Memphis, and then rail it from there,” Gravine said.
“If we had to, we would throw it on the rail from L.A. or Seattle, somewhere like that.”
The company is taking the strike threat seriously, she said, “but we have a feeling that it’s going to be a lot of pressure if there isn’t a decision made,” and one side will give in.
“Basically, ships will be floating out in the water, waiting to come in or go out,” she said, and “it will basically shut down the entire East Coast in that Christmas rush.”
Late last month — before the mediation announcement — National Retail Federation President and CEO Matthew Shay warned in a press release that “lack of a contract could drive shippers away from East and Gulf Coast ports in the same way that a 2002 West Coast ports lockout caused shipping to shift in their favor.
“Without such certainty, retailers and others will surely re-evaluate their supply chains and the short-term and long-term reliance on these ports.”