Mitsui OSK Lines Ltd, Japan's second-biggest shipper, may decide as early as today to slow ship departures to the US West Coast as port closures there disrupt trade with Asia's leading market.
"A delay of one week for one ship could mean millions of dollars of loss for us," said Osamu Suzuki, general manager of the company's liner division.
PHOTO: AP
Bigger rival Nippon Yusen KK said it has 20 ships off the West Coast, where a labor dispute has shut 29 ports for six days.
Other companies are also feeling the effects. Shares of Nintendo Co, the world's No. 2 video-game maker, plunged as much as 15 percent in Osaka after it cut sales forecasts for its GameCube video console and said the port halt may delay products bound for US stores for the holiday shopping season.
The closure of the ports, which handle about US$300 billion of mostly Asian goods annually, could hurt corporate profits and economic growth if it continues much longer.
"I would get a bit nervous if it goes beyond Sunday," said Song Seng-Wun, a regional economist at GK Goh Research Pte in Singapore. "If it goes beyond this couple of weeks, we have to be a bit more worried about fourth-quarter growth prospects."
Nippon Yusen and other shippers face reduced earnings if the dispute continues, said Futoshi Usui, an analyst at Nikko Asset Management Co. "The extent to which shippers will have to revise their earnings will depend on whether they can divert cargo to other ports in Mexico and Canada, but you'll probably see an impact on earnings after another week or so," Usui said.
Sony Corp and automakers Nissan Motor Co and Toyota Motor Corp are among companies experiencing disruption.
Sony said a San Diego plant that makes its Vaio computers is short of parts. Lack of components was also expected to halt production at a Fremont plant that Toyota shares with General Motors Corp. Nissan said it may have to halt its own US output if the ports stay closed next week.
Mitsui OSK said a shipping group it leads is reviewing trans-Pacific sailing schedules. Together with Hyundai Merchant Marine Co of South Korea and the APL Ltd container unit of Singapore's Neptune Orient Lines Ltd, it expects to decide "in the next few days, or even today" whether to reduce services, said Mitsui spokesman Hidenori Onuki.
The dispute is costing the US about US$1 billion a day, California Governor Gray Davis said.
Talks between the union which, represents 10,500 dockworkers and the Pacific Maritime Association, which runs the ports, will resume today, said Jeremy Prillwitz, a spokesman for the International Longshore and Warehouse Union.
The two sides will try to reach a deal on new contract terms.
An agreement to use a mediator applies only to talks on how labor-saving technology can be added at the ports while preserving union jobs, Prillwitz said.
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