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Wine shipments could be hit by surcharges over strikes at US ports

Published:  23 May, 2014

Shipping firms are already announcing surcharges which could hit wine shipments hard ahead of feared industrial action at western US ports.

The surcharges would cover all US ports, not just on the West Coast. Information from wine logistics specialist JF Hillebrand in the USA suggests that the average surcharge would range from $800 per 20 foot container to $1,000 per 40 foot container. What is more, the surcharge could be levied even if a strike doesn't happen, but if work stoppages, slowdowns, strikes or lock-outs take place or are threatened.

The dispute centres around the renegotiation of contracts between the International Longshore and Warehouse Union and the Pacific Maritime Association, whose existing six-year agreements expire on June 30, 2014.

David Mawer, managing director of JF Hillebrand UK, told "There is history and negotiations can get quite ugly. The responsible approach is to make contingency plans."

Mawer said the firm had been "flagging [the issue] to our customer base for a while".

"History tells us that industrial action will form part of the process. We're advising customers to consider bringing forward orders and building up stock in the UK as a safeguard.

He warned that if industrial action comes it will be "very united" which would cause difficulties in "finding alternative routes out". There would also be cost implications involved with taking freight across to the East coast or down to the Gulf coast. "The unions [throughout the US] are very strong and it's difficult to reach an alternative arrangement," he added.

Add the deliberate delayed start time to negotiations, which only "intensifies pressure" on ports, and the problem becomes even greater.

Mawer speculated that were a strike to go ahead, "there will be no vessels coming out of the west coast for the length of the dispute". Although some other countries ship via the United States' west coast, Mawer said Californian wines were at greatest risk.

"Importers are taking all possible steps to ensure minimum disruption to supply, and major shippers are taking it very seriously."

Companies shipping wine must also consider the weather conditions and whether or how this would impact on their cargo should their wine be held up.

Aside from shipping out of the country, any industrial action would have a very serious effect on the US economy.