Automotive importers and exporters that rely on West Coast maritime facilities could experience continued shipping delays going into the summer months in the wake of a slowdown by dockworkers at 29 American seaports.
Want more? Enjoy a free subscription to Aftermarket Business World magazine to get the latest news in the automotive aftermarket industry. Click here to start your subscription today.
A tentative settlement of the labor dispute has been reached between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), yet cargo backlogs are expected to present continued logistical challenges as the ports set sail to catch up.
In late February there were 36 vessels sitting idle at anchor in the Los Angeles/Long Beach harbor – a figure that is four times the usual waiting-time rate. The impacted docks stretching from California to Washington handle 40 percent of all international imports arriving in the U.S.
“It is important to note that the slowdown at West Coast ports in the U.S. affects both imports and exports,” said Steve Handschuh, president and CEO of the Motor & Equipment Manufacturers Association (MEMA).
He points out that the members of MEMA and its divisions – the Automotive Aftermarket Suppliers Association (AASA), the Heavy Duty Manufacturers Association (HDMA), the Motor & Equipment Remanufacturers Association (MERA) and the Original Equipment Suppliers Association (OESA) – have long maintained global manufacturing footprints that depend on reliable and timely cargo flows.
Industry suppliers export $62 billion in automotive parts to Pacific countries, including South America and Asia, and import $74 billion in components from the region. Automakers export 2 million vehicles a year from the U.S. at an additional value of more than $51 billion, according to Handschuh, who in an interview on CNBC called for a swift negotiated settlement as the slowdown persisted.
“It’s playing Russian roulette with the U.S. economy,” he warned the international television network’s viewers. “It’s already costing our industry billions of dollars. Trucks are waiting for days to pick up one container.”