It’s been a tough start to the year for global supply chain interests. Major winter storms throughout the U.S. have disrupted transportation. Historic flooding in Australia ruined crops and destroyed infrastructure. Severe drought in China threatens to drive up global wheat prices. And, in France, well, it’s more of the same: port strike after port strike.
|The difference is that, in time, the supply chain recovers from winter storms, flooding and drought. They are unpredictable events that could hit anywhere at any time. But in France, the stoppages are becoming predictable — and when disruption is predictable, shippers and carriers look elsewhere.
That’s the fear among ports from Le Havre to Marseilles embroiled in the latest rash of strikes to cripple cargo operations since the beginning of the year. The nationwide stoppages, to press union demands for early retirement for some 6,000 dockworkers with arduous jobs, followed a wave of walkouts last year that robbed French ports of the benefits of the sudden, strong global trade rebound that powered double-digit growth across the European waterfront.
French ports, which have trailed their European competitors for years, risk falling further behind as ocean carriers and shippers seek to steer business through more reliable ports. At Marseilles, France’s largest port by tonnage, 2010 traffic grew just 3 percent year-over-year, to 86 million metric tons, while container shipments increased 9 percent to almost 954,000 20-foot equivalent units.
That’s not bad considering the port suffered 50 to 60 days of strikes, including a 33-day stoppage at the giant Fos-Lavera oil terminal, and lost some 107,000 TEUs of traffic diverted to other Mediterranean ports.
But Marseilles’ traffic pales compared to Rotterdam, Europe’s largest port, whose total traffic jumped 11 percent to a record 430 million tons, and Antwerp, which was up 13 percent at 178 million tons. Yet Marseilles was France’s top performing port last year, growing three times faster than the 0.8 percent average rate at French ports overall. Still, it grew less than half the 7.7 percent average increase for all European ports.
Le Havre, France’s second-largest port but largest container hub, suffered a 5 percent drop in traffic to just more than 70 million tons, largely because of lower crude oil imports. Containerized shipments increased 5 percent to 2.4 million TEUs, trailing Rotterdam’s 14 percent surge to a record 11.1 million TEUs and Antwerp’s 16.1 percent gain to 8.5 million TEUs.
This year’s strikes are estimated to have cut traffic at French ports by 40 percent through mid-February. Le Havre alone lost at least 50 of 160 scheduled container ship calls in January. The stoppages are fueling fears that the diversion of services to foreign ports will be permanent, resulting in higher transportation costs for local companies.
This year’s strikes are the latest in a war of attrition by the CGT, the dominant dockworker union, dating back to 2008’s unsuccessful six-month campaign of walkouts, and weekend and overtime work bans to derail the government’s port reform program.
The government said its reforms would improve lagging productivity and lure back France-bound traffic, especially containers, that pass through foreign ports. Annual container traffic, it said, would increase from 3.6 million TEUs in 2007 to 10 million TEUs in 2015, creating an additional 30,000 jobs on the waterfront.
French workers are notoriously reform-averse. The last port reform in 1992 transferred approximately 38,000 dockworkers to private companies’ payroll but left crane operators and maintenance staff on port authorities’ books.
The crane operators and dockworkers worked different hours and had different vacation schedules, a recipe for low productivity and labor strife.
The CGT accepted — grudgingly — the latest reforms and cut good deals for crane operators under their private employers, but the moves left a legacy of bad blood between the union and the government. That has poisoned the latest dispute, with the government rejecting an agreement in principle between port employers and the CGT in late 2010 that would allow up to 6,000 dockers to retire four years early.
The government, which passed legislation raising the national minimum retirement age for all workers by two years to 62 shortly after the CGT cut its own deal, insisted dockworkers could only retire two years early.
Even after a return to normal, France’s ports face a struggle to improve an image scarred by more than three years of strikes and to stop a market share erosion.
On paper, French ports have a potential that is the envy of its European rivals. France is Europe’s second-largest economy after Germany, is one of the world’s top exporting nations, has access to the Atlantic and the Mediterranean and sits at the head of the giant north European port range.
Yet France remains largely a no-go area for the giant global container terminal companies, private equity investors and banks, and ocean carriers that have moved into the European waterfront, from Liverpool to Piraeus, in the past 15 years.
Contact Bruce Barnard at email@example.com.