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Shippers Turn to East, Gulf Ports

October 10, 2002

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Manitowoc Cranes Inc. built a 40-foot long crane extension for a construction crew in Singapore. All the Wisconsin-based company needed to figure out was how to get the 6,800-pound part to its destination.

Under normal circumstances, Manitowoc could have shipped the ``boom section″ to Singapore in about 3 weeks: seven days by land and 14 days by sea. But the closure of 29 West Coast ports created a dilemma for Manitowoc: Use another port and ensure its arrival by early December, or hold out until the West Coast clears up?

After 10 days of anxious deliberation _ and just hours before the lockout ended _ Manitowoc booked space on a ship leaving the port of Houston on Oct. 17. A truck is scheduled to pick up the $15,000 part on Friday.

``The West Coast is not a viable, expedient port at this time,″ said Judy Korte, Manitowoc’s traffic manager. ``I took alternative measures because of everything being backed up as far as it is.″

The question of which port to use is a conundrum affecting companies from Peoria, Ill., to Tokyo, even as dockworkers late Wednesday began unloading the armada of cargo that piled up during the lockout.

With roughly 4,500 40-foot-long containers on each ship, it will take anywhere from several weeks to a couple of months for West Coast dockworkers to eliminate the 200-ship backlog, experts said. As a result, shipping companies, manufacturers and port officials say U.S. ports on the East Coast and Gulf Coast _ as well as those in Mexico and Canada _ will be used as an alternative until the labor strife is fully resolved.

To be sure, other ports are picking up only a fraction of the cargo being diverted from the Pacific Coast. Not only is the trip from Asia to these other ports much longer, but many ships are too big to pass through the locks of the Panama Canal.

Companies that began regular shipments through alternative ports before the lockout began are expected to keep those precautionary plans in place.

Illinois-based equipment maker Caterpillar Inc. said it has been shipping finished products through the East and Gulf coasts since the West Coast lockout began, and that these new routes are ``sustainable for the long run.″

A spokesman for Matsushita Electric Industrial Co. said the Japanese electronics maker was ``seriously thinking″ about redirecting U.S.-bound shipments through the East Coast.

In addition to concerns about how efficiently longshoremen will work in the upcoming weeks, industry insiders fear a resumption of the labor dispute once the court-ordered injunction is lifted.

``If I were a West Coast-based importer, I’d make contingency plans,″ said Stewart Hauser, president of the New York-New Jersey Freight Fowarders and Customs Brokers Association.

Port officials and shipping executives in Virginia, Maryland and New Jersey said the East Coast docks have been busier than usual for several months, thanks to the upcoming Christmas shopping season and the need by many retailers and manufacturers to rebuild inventories that were allowed to dwindle during the recession.

Cargo volumes also increased during the spring and summer as companies such as Caterpillar, Toys ``R″ Us Inc. and Wal-Mart Stores Inc. made advance plans to avoid the West Coast, where the labor dispute was brewing.

In some cases, port officials said it is difficult to distinguish how much of an increase could be directly attributed to the West Coast port lockout. Officials at the Port of Philadelphia and the Elizabeth (N.J.) Marine Terminal, for example, said there was no noticeable impact.

``People are improvising wherever they can,″ said Sig Shapiro, chairman of Samuel Shapiro & Co., a Baltimore-based freight-forwarding company. Because of the port closures out West, Samuel Shapiro arranged this week to have 40 containers of shoes airlifted to Maryland from a factory in Asia.

Joe Dorto, chief executive of Virginia International Terminals, which operates the state’s ports, said lingering delays on the West Coast might increase business at Virginia’s ports by as much as 4 percent.

``For the remainder of the year, traffic coming through here is going to be heavy,″ he said.

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