The strike at US ports is going to hit Stolt-Nielsen, but the company is not sure how hard just yet.
During its third-quarter earnings presentation in Oslo, chief executive Udo Lange said the tank and terminal business would be unscathed by members of the International Longshoremen’s Association (ILA) walking off the job at US East and Gulf Coast container and car carrier ports on Tuesday.
But the tank container business — the second-biggest segment of the company by revenue — would probably suffer some impact, he said.
“This is a fluid situation … that the [Stolt Tank Containers] team is monitoring closely,” he said. “The financial impact is not clear as of yet.”
Lange said the company is enacting contingency plans worked out with customers over several weeks, including using Stolt-Nielsen-owned depots to store containers, but he admitted that plan could work only if the strike is relatively short.
“Then when the supply chain disruption hopefully resolves, then we can continue the shipping,” he said. “That solution only holds as long as we have space in the depot.”
Members of the ILA went on strike on Tuesday morning after its contract with the US Maritime Alliance, which represents management, expired.
Impacts of the strike on the US economy range anywhere from the low hundred millions per day to $5bn per day.
The union wants higher wages and more protection from automation. ILA president Harold Daggett argued that the dockworkers worked through the Covid-19 pandemic, exposing themselves to the virus while keeping global trade moving and helping liner operators make billions.
For the quarter, Stolt Tank Containers brought in $167m in revenue, behind Stolt Tankers’ $456m. Tank Container shipments grew 2% from 36,600 a year ago to 37,400 in the latest quarter.
