Striking It Poor

From World Wide Shipper on 7/5/2014:

“WASHINGTON, DC — As negotiations continue for a new contract agreement covering 13,600 dockworkers at 30 ports stretching from San Diego, Calif., to Bellingham, Wash., a new study shows the U.S. economy could lose as much as $ 2.5 billion a day if a prolonged West Coast shutdown occurs.

“The study, conducted by the National Association of Manufacturers (NAM) and the National Retail Federation (NRF) by economists at the Interindustry Forecasting Project at the University of Maryland, found that the economic repercussions of a port closure would grow with time.

“A 5-day stoppage would:
• Reduce GDP $ 1.9 billion a day;
• Disrupt 73,000 jobs; and
• Cost the average household $ 81 in purchasing power.

“A 10-day stoppage would:
• Reduce GDP $ 2.1 billion a day;
• Disrupt 169,000 jobs; and
• Cost the average household $ 170 in purchasing power.

“A 20-day stoppage would:
• Reduce GDP $ 2.5 billion a day
• Disrupt 405,000 jobs; and
• Cost the average household $ 366 in purchasing power.

“The last major West Coast port disruption occurred in 2002, when management locked out dockworkers for 10 days until then-President George W. Bush ordered the two sides back to work under the Taft-Hartley Act. That shutdown was estimated to cost the U.S. economy several billion dollars.” —

Our troubles wouldn’t end there, though. Hapag-Lloyd has already indicated how carriers will deal with lost revenue. Its customers have been informed that they’ll be hit with a “congestion surcharge” of $ 800 per 20ft, $ 1,000 per 40ft and $ 1,266 per 45ft container if there is labor unrest.

According to the carrier, the charge would apply to all import and export cargo, based on the date of cargo arrival at all US locations, direct or via Canada or Mexico, and for all export cargo received by the carrier or its agent on or after June 10 at any US location, whether shipped via Canada or Mexico ports.

Would you care to guess who’ll foot the bill for these “surcharges”? Right. American consumers.