NCPA - National Center for Policy Analysis

U.S. Ports Have Become Trade Bottlenecks

July 9, 2001

Partly because of rigid union rules, U.S. ports are losing the battle to keep up with the brisk growth in world trade, experts report. Over the past decade, many ship terminals in Europe and Asia have invested in new technologies to speed trucks through their gates and move cargo to and from ships faster and more cheaply.

But most major U.S. ports have continued to operate much as they did during the 1970s and '80s. Today that means long lines of trucks and many wasted hours waiting to load or unload cargo onto or off ships.

  • U.S. ports handled more than $400 billion worth of containerized cargo last year -- up from $250 billion a decade ago.
  • Industry experts say antiquated U.S. systems are costing the economy more than $1 billion annually.
  • With the volume of U.S. trade with Asia expected to double in the next 10 years, U.S. exporters and importers say they could face even greater delays, higher costs and poorer service unless American ports can improve their productivity.
  • Some port operators fear their customers might eventually find it more cost-effective to shift U.S.-bound cargo to docks in Mexico, Canada or the Caribbean and transport it the rest of the way by truck, rail or feeder ships.

The greater efficiencies of Asian ports allow them to unload and reload a container ship in about 40 hours -- compared to 76 hours in southern California. In Asia, within two or three minutes after a ship is secured, loading and unloading cargo begins -- a process which can take anywhere from 10 minutes to an hour in the U.S.

Shipping executives blame that disparity on work rules perpetuated by the ILWU, the powerful longshoremen's union. For example, the union insists that its clerks enter cargo information into a computer manually -- even though optical scanners and other technology could do the task more efficiently.

The ILWU -- whose members can earn $100,000 a year without a high school diploma -- reportedly keeps a tight hold on the labor supply at its ports, at times punctuating its demands with slowdowns and work stoppages.

Source: Daniel Machalaba, "U.S. Ports Are Losing the Battle to Keep Up with World Trade," Wall Street Journal, July 9, 2001.

For WSJ text


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