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Nail-biting times for US wine shipments as contract deadline looms

Published:  01 July, 2014

Delays and surcharges are on the cards for wine shippers as so far negotiators have failed to reach agreement on new contracts between dockworkers and their employers on the US west coast.

Time is running out as last minute contract negotiations continue right up to today's (July 1) 5pm (PST) deadline.

But, according to US-based logistics and transport trade journal "no one is panicking and disruption does not appear imminent".

Wine shipments could face delays if resolution not reached between US dock workers and employersWine shipments could face delays if resolution not reached between US dock workers and employersTime is running out: the deadline for contract negotiations is 5pm PST today, July 1, but although an agreement is unlikely, no-one is panicking yet.

The contracts up for renegotiation covers  20,000 dockworkers at 29 ports stretching from either end of the US west coast from San Diego in California to Bellingham in Washington.

According to a study for US groups the National Association of Manufacturers and the National Retail Federation by the Interindustry Forecasting Project at the University of Maryland, a prolonged West Coast port shutdown could cost the US economy as much as $2.5 billion per day.

"A protracted dispute between the negotiating parties could lead to reduced or shuttered terminal operations for an extended period. If such disruptions occur, the economic impact would be significant and widespread," the study said.

Last month JF Hillebrand UK's managing director David Mawer told that many shippers were introducing surcharges, which would cover all US ports, not just on the West Coast. The average surcharge is cited anywhere between $800 per 20 foot container to $1,000 per 40 foot container. The extra fees could be levied even if a strike doesn't happen, but if work stoppages, slowdowns, strikes or lock-outs take place or are threatened.

Obviously Californian wines are facing the greatest disruption.

Companies that ship wine out of the US or through west coast ports have already been advised, over the past few months, to bring forward orders and build up stock in the UK, especially given that finding alternative routes out of the USA would be difficult and costly.

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 today.