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 port shutdown occurs.
The study, conducted by economists at the Interindustry Forecasting Project at the University of Maryland for the National Association of Manufacturers and the National Retail Federation, found that the economic repercussions of a port closure would grow with time.
“A protracted dispute between the negotiating parties could lead to reduced or shuttered terminal operations for an extended period,” the joint study warned. “If such disruptions occur, the economic impact would be significant and widespread.”
For example, 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.
“It is important for the parties at the table as well as others to fully understand the economic consequences of a port disruption,” said NRF president and CEO Matthew Shay.
“Any supply chain disruption, whether it’s a port slowdown or outright stoppage, would cripple international trade, stymie supply chains and hurt domestic employment and consumer spending. For retailers and their customers, a port closure would mean a delay in back-to-school and holiday shipments that could significantly drive up consumer prices.”
Jay Timmons, CEO of the manufacturer’s group, agreed.
“Manufacturers depend on the ability of West Coast ports to efficiently move cargo valued at 12.5 percent of U.S. GDP,” he said. “A shutdown would erode that figure and inflict long-term damage to our competitiveness as manufacturers and as a nation. The parties must come to an agreement before the current contract expires.”
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 resulted in many shippers diverting their cargo to the East Coast. When they discovered the Port of Savannah, a number of them made the shift permanent.
Already, Savannah and other East Coast ports are seeing an uptick in volume as shippers divert some cargo as a precautionary hedge against the possibility of a strike.
New board leadership
New Georgia Ports Authority chairman Jim Walters sees huge opportunities opening up for the Savannah port as the Savannah Harbor Expansion Project becomes a reality.
“That should make us the most competitive port on the East Coast,” he said.
Having served on the Georgia Department of Natural Resources for 10 years before joining the GPA board two years ago, Walters is no stranger to the long and sometimes frustrating process.
“Now our top priority is getting all the parts and pieces together to actually start dredging.
“Savannah is being recognized as the port of choice by a lot of shippers,” Walters said. “We have quick turnaround times and time is money.”
“We have a solid business model and should continue to grow.”
Joining Walters on the executive board are vice chairman James L. “Jimmy” Allgood of Dublin and secretary treasurer A.J. “Joe” Hopkins of Folkston.
Senior business reporter Mary Carr Mayle covers the ports for the Savannah Morning News. She can be reached at 912-652-0324 or at mary.mayle@savannahnow.com.
SHIPPING SCHEDULE
These are the ships expected to call on Georgia Ports Authority’s Garden City and Ocean Terminals in the next week. Sailing schedules are provided by Georgia Ports Authority and are subject to change.
Terminal Ship name Arrival
GCT MAERSK DANANG Today
GCT MAERSK CAROLINA Today
GCT HS BRUCKNER Today
GCT HS LIVINGSTONE Today
GCT MSC ALESSIA Today
GCT OOCL VANCOUVER Today
OT CS CANDY Today
GCT OVERSEAS ALCESMAR Saturday
GCT JPO CANOPUS Saturday
GCT TSINGTAO EXPRESS Saturday
GCT SAIGON EXPRESS Saturday
GCT UASC JEDDAH Saturday
GCT MSC ESTHI Saturday
GCT MSC JUDITH Sunday
GCT EVER LISSOME Sunday
GCT CMA CGM ATTILA Sunday
GCT JPO VULPECULA Sunday
GCT WASHINGTON EXPRESS Sunday
OT TYSLA Sunday
GCT AL RAIN Monday
GCT MAERSK CHICAGO Monday
GCT HYUNDAI SUPREME Monday
GCT VECCHIO BRIDGE Monday
OT BBC SWITZERLAND Monday
OT ATLANTIC ELAND Monday
OT TAMERLANE Monday
GCT PETROCHEM TRADER Tuesday
GCT MOL EXPEDITOR Tuesday
GCT MSC MELISSA Tuesday
GCT MUSTAFA DAYI Tuesday
GCT NYK NEBULA Tuesday
GCT OAKLAND EXPRESS Tuesday
GCT WEHR OSTE Tuesday
GCT ZIM MONACO Wednesday
GCT NORTHERN DEXTERITY Wednesday
GCT ISLANDIA Wednesday
GCT RHL FELICITAS Thursday
GCT MSC VANESSA Thursday
GCT ERNEST HEMINGWAY Thursday
GCT MAERSK WILMINGTON Thursday
GCT MSC SINDY Thursday
GCT CSAV LARAQUETE Thursday
GCT HANJIN DUESSELDORF Thursday
GCT KOBE EXPRESS Thursday