("The Journal of Commerce") The chief executive of APL . warned Tuesday that the growth of world trade is threatened by port and rail congestion, not just in the United States, but worldwide.
The problems of congestion will become particularly acute in 2005 and 2006 when most of the world's liner companies deploy new 8,000- and 9,000-TEU container ships that are on order, Ron Widdows told the Textile
and Apparel Trade and Transportation Conference..
"What is not understood is the impact of congestion on carriers' ability to deploy new capacity in 2005," Widdows said. "The problems of inadequate
terminals capabilities are global and will be with us for years. Intermodal capability is stretched at nearly all major load centers worldwide."
Widdows, who heads up the liner division of Singapore's
Neptune Orient Lines, has spent much of the year warning of growing congestion in an effort to rally support for infrastructure solutions in the U.S. His speech Tuesday marked the first time he had broadened his warning
to include most of the world's ports.
Widdows said his speech was aimed at shocking the audience of some 400 textile and apparel importers who gathered to hear experts assess the impact of the Jan. 1 elimination
of U.S. quotas on textile imports.
"All of the work of the last 15 years on building global supply chains is beginning to become unwound," Widdows said. "The [ocean] trip from Hong Kong to Los
Angeles should take 19 days, but the average is now 24 because of port congestion."
Widdows said that "we're getting very low productivity [at LA-Long Beach] on the part of the ILWU [International
Longshore and Warehouse Union]," he said. "The labor management relationship between the Pacific Maritime
Association has only made the situation worse. It needs to change."
Widdows said that
infrastructure problems are contributing to a deterioration of service reliability and loss of velocity through the transportation chain worldwide. This is impacting purchasing and distribution patterns.
"In
the United Kingdom and France the infrastructure is even worse than on the [U.S.] West Coast in some ways," he said. "Asia, India, Singapore and Vietnam are coping better but are having problems..
Widdows' alarm resonated with conference-goers. In an electronic poll taken immediately after, 74 percent of the audience said that congestion in Los Angeles-Long Beach was the most important issue facing them.
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