Daily Archives: September 12, 2012

The Looming Strike Might Cost Billions – But You Don’t Have To Lose a Dime!

A recent article over on Fox Business on how the looming strike could cost billions if all of the east-coast US ports are shut down on Oct. 1 (because of a strike) is scary, unless you are a multi-national who has the option to simply shift your freight North or South. While such a shift might not be optimal for you, as it will require you to build new supply lines, secure new cross-docking and storage facilities, and, hopefully, use new free-trade zones (and become familiar with the optimal utilization of such if you aren’t already using them) at a time when you are ramping up for the holiday season, not only might such a move prevent you from experiencing losses (that could lead to ruin if the strike was a long one), but it might even save you money in the long run!

While often overshadowed by their southern and northern neighbours, Canada’s ports and Mexico’s ports are open for business, and some have been expanding their capacity significantly in recent times. For example, as recently pointed out in Halifax Gets It There dot com and summarized succinctly on the Port of Halifax site, the Port of Halifax has an ample supply of empty containers, no congestion, and capacity to space at its terminals and on rails. Plus, it already has 11 of the world’s top 15 global shipping lines and the capacity to handle up to 2.5 M TEUS. This is almost the TEU volume of The Port of New York and New Jersey. Plus, the Port of Montreal can handle 1.6 M TEUS! Now, it’s true that Montreal is currently at 80% of capacity while Halifax is barely at 30% of (projected) maximum capacity (remembering that Halifax is situated on the second largest natural harbour on the planet), but the Port of Montreal is also in the midst of the first phase of a major expansion project that will increase capacity by 15% in less than two years. And in New Brunswick, for those looking for a smaller port with less competition, there is the Port of Saint John which can handle 150,000 TEUs.

In Mexico, you also have a number of ports to choose from, including the port at Altamira, the port at Tuxpan, and the port at Progreso. As far as I can tell, Altamira can handle at least 50,000 TEUs, Tuxpan is building a facility to handle at least 90,000 TEUs, and Progreso can handle a whopping 300,000 TEUs per year. Not the volume of the big East Coast Canada ports, but nothing to sneeze at either — and Mexico has five more ports on the Gulf.

So redesign (at least some of) your supply chain now to use Canadian and Mexican ports, and you won’t have to worry about losing a dime if the East Coast US Ports go on strike.