Dodging a Bullet [Defense Transportation Journal]

Def_Transport_Jl, 2013-02-01

The recently postponed strike by the International Longshoremen's Association (ILA) once again highlighted the critical importance of transportation to the nations economy. Impacting East and Gulf Coast ports, a strike by dockworkers would have stopped the movement of all ocean cargo other than perishable commodities, automobiles and Department of Defense (DOD) goods. The ramifications of such a stoppage are staggering. The West Coast lockout in 2002, when the economy was on firmer footing, lasted 1 1 days and cost the nation an estimated $ I billion per day.

We have become such a global economy that any interruption in transportation services is felt almost immediately whether it involves the movement of people, cargo, or both. There is no doubt, however, that our ports are especially critical given that they facilitate the transfer of goods between ocean and domestic transport networks. If the ports close, shippers have few options. Goods can be rerouted through other ports, but, in the case of a massive closure such as the one threatened, the options are few and involve major changes to a company's supply chain. Shifting to airfreight may be possible, but the cost is prohibitive. The other choice is to wait out a strike and risk stockingout customers whose on-hand inventories are depleted before a settlement. In short, higher costs, dissatisfied customers, and upended supply chains are inevitable.

Carriers suffer as well, not only while the ports are closed, bur once they reopen. Ship lines run tight global schedules that cannot easily be changed, so rerouting vessels is extremely problematic. Similarly, if cargo cannot be off-loaded, more cargo cannot be on-loaded someplace else. During the West Coast strike mentioned above, ships sat offshore waiting for the strike to end and even, in some cases, returned to (he Far Ease from whence they had come. The reality is that, while some US-bound freight was moved through Mexican and Canadian ports, they simply could not handle all of the diverted cargo. Once a settlement is reached, those disrupted vessels (and their cargoes) must be reinserted back into their respective rotations and normal operations resumed. On the land side, railroads and trucking companies have idle capacity which may not be useful for anything other than, for example, moving containers. Once the affected ports reopen, these same carriers are immediately swamped with cargo that they simply cannot move in or out of their respective ports fast enough. This surge can prove especially problematic for the rail carriers because of their fixed routes, resulting in saturation that slows movements and leads to lost cargo. Clearly, the transport system can take weeks, if not months, to completely recover from the closure of even some of the nation's major ports, let alone the number involved in the ILA dispute.

As I've opined before, I think the public has no idea how important and crucial our transportation resources, especially our ports, are, to our quality of life. I'm not sure how many people even know a port strike was narrowly averted and is, as I write this in early January, still a possibility. News of the impending labor action was sparse until days before the strike was about to happen. Most people don't really know what longshoremen do anyway (I spent years in Charleston before I really understood what the difference is between longshoremen and stevedores), so their concern regarding a strike is minimal at best. Indeed, assuming the stoppage doesn't last too long, people may not notice it all.

However, we'd certainly all notice a protracted loss of our ports or any other component of our transportation system. The events of September 11, 2001, provided a glimpse of how much we, as a society, depend on air travel and how difficult living without that resource can be, even for a few days. Our reliance on the movement of freight is no less important, just a lot less visible. Hopefully, we will never have to discover what life is like without that capability.

Dr. Kent N. Gourdin, Editor, DTJ

Director, Global Logistics and Transportation Program College of Charleston

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