Source: Ship and Bunker
February 18th 2015
The ongoing labor dispute in U.S. West Coast ports is expected to lead bunker suppliers seeing weakened demand as congestion builds and shippers make arrangements to use other ports, Platts reports.
Negotiations between The International Longshore and Warehouse Union (ILWU) and employer representatives Pacific Maritime Association (PMA) have been ongoing since last summer, with shipowners having raised complaints that the union is intentionally slowing work as a tactic.
“We’ll see ships that are going to fall out of their schedules, backlogs are going to grow and grow,” said an unnamed source.
“Everyone is sort of grasping at what opportunities there are to keep vessels moving.”
West Coast ports have experienced several work stoppages over the past few months, including one which occurred over the past weekend.
According to market sources, wait times for unloading cargo off large containerships have reached several weeks, while a supplier said that fuel delivery windows have in response been forced to become flexible.
It was speculated that the issue could also impact bunker prices.
“Suppliers aren’t as keen on selling and resupplying and barges get caught up with shifting cargo operations,” said a West coast trader.
“Suppliers envision port issues and reduced demand, so they resupply less and prices go up.”
According to a Vancouver-based source, some ships have already begun re-routing north to Canada avoid the dispute, though contractual obligations are expected to limit how many vessels will be able to divert their operations.
Though the labor contract between the ILWU and the PMA officially expired as of July 1, 2014, tensions rose significantly last November after the PMA released a statement condemning unionized workers for withholding labor.