Tags: West coast | dock | shutdown | labor

CNBC: Here's Who Can Benefit From West Coast Dock Shutdown

By    |   Friday, 20 February 2015 06:27 PM


It has been estimated that the labor conflict slowing down ports on the West Coast will cost the economy up to $2 billion a day if it turns into a complete shutdown.

But not everyone is a loser. CNBC identified several industries that will enjoy at least a partial benefit from the situation.

  • Air Freight. If you can't transport by sea or land, why not by air? "Some importers, like electronics dealers and luxury retailers, can afford to put their cargo on planes, despite at least a tenfold increase in shipping costs," writes CNBC's Allen Wastler. "Their profit margin may be squeezed, but they are still making money in most cases.
  • "Railroads. The two primary railroads moving cargo from the West Coast, the BNSF Railway (owned by Warren Buffett's Berkshire Hathaway) and Union Pacific Corp., will suffer. But their eastern counterparts, CSX and Norfolk Southern, may see some added short-term business from diverted cargo."
  • Ports and truckers on the east coast. Cargo traffic may be diverted their way from the West Coast.

Still, the overall impact isn't good. Many businesses are complaining. For Levi Strauss, "the situation has gone from manageable to bad," said CEO Chip Bergh, according to The Wall Street Journal. The apparel company imports a third of its product through the West Coast.

Softline Home Fashions, which imports fabric for curtains and other home decorations, has about $800,000 of goods waiting to be unloaded on the West Coast, the paper reports.

"We’re in trouble right now with some of our customers," which include major retailers, such as Walmart and J.C. Penney, Softline President Jason Carr told The Journal. "It’s a major headache." He said he will have to decide soon whether to fly in merchandise from China.

"In any given year the West Coast ports handle between 10 and 15 percent of GDP," illustrating "their importance as a trade gateway," Matt Troy, executive director at Nomura Securities International, told Bloomberg.

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It has been estimated that the labor conflict slowing down ports on the West Coast will cost the economy up to $2 billion a day if it turns into a complete shutdown.
West coast, dock, shutdown, labor
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2015-27-20
Friday, 20 February 2015 06:27 PM
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