Potential strike by East Coast longshoremen could affect Augusta businesses

A possible strike by the East Coast longshoremen at the Port of Savannah has several area companies bracing for the effects.

 

Each year, Thiele Kaolin Co. in Sandersville and Wrens exports 400,000 tons of kaolin through the Port of Savannah. The company exports a third of the mineral, which is used mainly as a paper coating. Most of the exports go to Asia.

The strike could bring the company’s export business to a standstill, said Randy Mayberry, the company’s director of international sales.

“To get this stuff to the West Coast, it would be astronomically expensive,” Mayberry said. “If the International Longshoremen’s Association goes out on strike, it’s going to have a tremendous, detrimental effect on the middle Georgia kaolin operations. It’s not going to be pretty.”

Their clients could lose confidence in them and look elsewhere, he said.

“If they don’t have raw materials, you can bet they’re going to figure out how to avoid a situation in the future,” Mayberry said. “We compete with materials mined in Brazil. There are a lot of other players that could supply this market. The Asian customers are loyal to service and quality. If you let them down, you’re going to suffer the ill effects.”

Other area companies could be affected.

Thiele Kaolin, DSM Chemicals and Club Car make up the top three port customers by volume in the region, according to a University of Georgia study.

Bryan Mash, the vice president of human resources at Club Car, said the company has a backup plan if the strike occurs.

“We’re continuing to monitor the situation, and we’re hopeful an agreement can be reached that would avert a strike,” Mash said. “Meanwhile, we have contingency plans in place to support our transportation needs and the needs of our customers.”

The NutraSweet Co. on Lovers Lane in Augusta ships about half of its sales through the Port of Savannah to customers worldwide. Most of its products are exported to Asia, but it also ships to Europe, Africa, Australia and Central and South America, company president Bill DeFer said.

NutraSweet exports NutraSweet brand aspartame, sweeteners and other ingredients manufactured at the plant.

“We’re trying to move product out of the country ahead of time,” DeFer said. “If need be, we would have to export product using West Coast ports, most likely Long Beach, Calif. We’d have to truck it all the way across the country. Both of those things create some extra expense for us, but at this point, can’t be helped. We have to ... make sure our customers have uninterrupted service.”

MTU Detroit Diesel Inc. imports and exports a large number of engine parts through ports in Savannah and Charleston, S.C., said Gary Mason, the senior public relations manager. The company manufactures large diesel engines for tugboats, locomotives, ships and mining equipment.

“Access to those ports was one of the reasons why we moved our production operations to Aiken County,” Mason said.

The company relocated its production plant from Detroit to Aiken County in 2010, he said. MTU Detroit Diesel ships all over the world, with much of its product going to its headquarters in Germany.

“We’re monitoring the situation,” Mason said. “We do have contingency plans in place should the strike actually come about. We feel we’ll be prepared.”

Negotiations for a new contract covering dockworkers at Atlantic and Gulf Coast ports have come to an abrupt halt, with the possibility of an end-of-the-month work stoppage looming larger and sending shippers scrambling to find alternatives for their holiday cargo.

Talks between the International Longshoremen’s Association and the United States Maritime Association, which represents 14 Atlantic and Gulf Coast ports, dissolved Aug. 22, less than half an hour into what was to have been a three-day session.

“It looks like we’re going to have a strike” when the current contract expires Sept. 30, ILA president Harold Daggett told the Journal of Commerce.

No new negotiations are planned.

At the Georgia Ports Authority, Executive Director Curtis Foltz said his staff has been watching the developments for months, although he was quick to point out that the authority doesn’t have a seat at the table.

Some shippers are already diverting cargo from Savannah, the fourth-busiest container port in the country and second-largest on the East Coast, to the West Coast, Foltz said, more so after the recent negotiations broke down.

“I both hope and expect they will be talking again, preferably sooner rather than later, so they can either reach an agreement by October or agree to extend the deadline,” he said.

The Savannah Morning News contributed to this story.

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Thu, 08/17/2017 - 23:54

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