One year after port slowdown, business adds up the impact
The protracted labor dispute that slowed West Coast ports one year ago cost Washington business nearly $770 million.
That’s the takeaway from a study commissioned by the Washington Council on International Trade Commissioned to mark the first-year anniversary of the contract dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association.
The slowdown caused lengthy delays between October 2014 and March 2015 when 13,600 workers at 29 West Coast ports, including the ports of Seattle and Tacoma, slowed operations during negotiations over wages, benefits, pensions and the assignment of dock-related work.
Washington’s $49 billion food and agriculture industry was particularly harmed.
Washington is one of the nation’s leading agriculture exporters. More than $15 billion in food and agriculture products moved through Washington ports in 2013, the third largest agriculture exporter in the U.S., according to the state department of agriculture.
The study calculates the value of goods not expired at $403 million and the loss associated with delayed imports at $345 million. Extra warehouse and trucking costs added $21 million to the total.
Washington’s ag industry suffered from shipping delays, spoilage, added warehousing and trucking costs, damaged relations with overseas customers and being forced to sell perishable items to domestic food processors as a loss.
According to the report, the Washington State Tree Fruit Association said 200,000 to 300,000 boxes of apples per week were not sold during the slowdown, adding up to a $95 million loss.
The Washington State Potato Commission said frozen French fry export losses totaled $23.5 million per month during the slowdown. The industry lost an additional $48 million in missed sales opportunities, it said.
Port activity normalized in early 2015, but agriculture-related businesses are struggling with the aftermath. Chelan Fresh Marketing, a fruit sales and marketing firm, laid off 250 workers or 20 percent of its workforce and has no plans to re-hire in the near future.
Hay exporters also were harmed by delays in shipping. The industry is particularly vulnerable because it is a low-value crop that’s expensive to ship. A survey of exporters found many lost market share in Japan and Korea to Australian and Canadian producers when they couldn’t fulfill contracts during the slowdown.
Because hay futures contracts are written in the spring ahead of the growing season, the industry had less time to recover .
The international trade council said its study covers short-term costs associated with shipping delays. Long-term damage to client relations could have a greater impact in the long term.
This story was originally published February 22, 2016 at 9:35 PM with the headline "One year after port slowdown, business adds up the impact."