M Chemical in L.A. sends shipments to Houston to avoid ports slowdown
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M Chemical Co. in Los Angeles has hustled to find an alternative to the ports of Los Angeles and Long Beach after a labor dispute drastically stretched delivery times.
The Los Angeles company, which makes chemicals for the oil and polymer industries, started suffering a slowdown at the end of 2014 of shipments of chemicals manufactured in Asia, co-owner Mark McDonald said.
Containers that once took two or three weeks to arrive began taking six weeks -- affecting the company’s business nationwide, McDonald said.
Shipments brought into the Southland “get railed to Houston or other locations we have,” he said. Any slowdown “affects not just the West Coast business but can affect our Houston operations or throughout the Gulf Coast or even the East Coast or Midwest.”
To blame is a months-long labor dispute between the longshoremen’s union and major shipping lines and terminal operators, which has hampered ports all along the West Coast. Members of the International Longshore and Warehouse Union have been negotiating for months with the Pacific Maritime Assn. on a new contract for about 20,000 dockworkers at 29 ports on the West Coast.
Late deliveries can mean hefty penalties for M Chemical. McDonald said the company recently paid a $50,000 penalty for an order that was delivered late due to the port congestion.
To cope, M Chemical started sending some shipments through the port in Houston, which takes about two weeks longer to arrive. The company is also carrying more inventory in case the stalemate continues.
Houston “takes a little longer but at least there is some certainty to it,” McDonald said.
Follow Shan Li on Twitter @ByShanLi
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