Long-term consequences of West Coast port congestion yet to be realized, say insurance specialists

Zurich Insurance and their head of Strategic Business Risk, Linda Conrad, are sharing some interesting insights into the longer-term financial implications of the prolonged West Coast port disruption for retailers across the country. 

While the labor disputes are now largely resolved, there is still an estimated 45 day backup for ships at the port which will continue to impact profitability for months, as repercussions continue along the supply chain. For example, Zurich has already encountered scenarios where retailers will not receive Easter and other seasonal items in time to stock for the holidays.

The reputational and financial impact from these types of procurement issues can be massive. Business disruptions not covered by insurance, and because the disputes were not considered to be a strike, the typical strike insurance most companies have would not be triggered here.

Furthermore, said Conrad, if there is no physical damage to cargo – just extreme delays – retailers cannot file a claim against these losses.