Colorado firms are relieved — but not yet off the hook — after a tentative agreement to end the West Coast port slowdown.
Shipping analysts said it could take up to three months
Exporters and importers alike were seeing their goods pile up at docks or in ships that couldn’t offload freight because of thousands of shipping containers clogging 29 West Coast ports.
“Everybody is glad to see it end, because it was a huge problem,” said Patrick Gallagher, president of Denver-based Gallagher Transport International Inc., a firm that facilitates shipping and customs clearance for business clients.
“It’s good news for sure,” he said. “But there’s still a huge backlog. Ratification (of the contract) will take time, then we have to start getting ramped up again.”
On Friday night, the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents employers, announced a tentative contract agreement to resolve a 9-month-long work slowdown at the West Coast ports.
had been exploring costly remedies, including air freight or using ports on the East Coast or Gulf of Mexico to move its 7,000-pound coils of aluminum sheet to Asian customers.
Shipping by air would have cost an estimated $1 per pound compared to about 10 cents a pound for trans-Pacific cargo ships, said Jeff Frim, president and CEO of Golden Aluminum. Using Gulf Coast or Atlantic ports would add an extra 15 days to transit times.
“There are additional costs to bear whether it’s on the customer’s side or on our side,” he said.
Frim said the firm has not curtailed production but was considering doing so if the port slowdown persisted. Cutting operations would have forced the layoffs of a portion of Golden Aluminum’s 170 workers.
“The reality is that we’re not completely out of the woods yet,” Frim said. “We still have to get through that backlog.”
The company’s aluminum sheet is used primarily for making cans. About 15 percent of its production is exported overseas, including 7 percent to Asian markets.
In a statement issued last week before the tentative contract agreement, American Furniture Warehouse president Jake Jabs said the company “actually had to remove popular furniture lines from our showroom because we can’t guarantee when they’ll reach our customers.”
U.S. Sen. Cory Gardner, R-Colo., said the port slowdown “had disastrous consequences for businesses, consumers and the entire economy… Colorado’s economy suffered needlessly because of this slowdown.”
Analysts said it is difficult to quantify the economic impact of the slowdown either in Colorado or nationwide, but the Agriculture Transportation Coalition has estimated that shipping delays have reduced U.S. farm exports by $1.75 billion a month. The North American Meat Institute pegs losses to U.S. producers at more than $85 million a week.
Steve Raabe: 303-954-1948, sraabe@denverpost.com or twitter.com/steveraabedp
