Dec 7 - Fitch Ratings has published a new special report titled 'Port
Credits Resilient in Face of Labor Action'. The report provides a summary of the
recent eight-day strike at the Ports of Los Angeles and Long Beach by the Office
Clerical Unit (OCU) of the International Longshore and Warehouse Union (ILWU).
The report also provides a brief analysis of the expected credit impact of a
strike or work stoppage.
While the strike has proved disruptive to logistics in the San Pedro Bay port
complex and the Southern California region more generally, Fitch Ratings does
not see a prolonged credit impact from the work stoppage. Key sources of
financial protection enjoyed by both the Port of Long Beach and the Port of Los
Angeles (both rated 'AA' by Fitch) include contractual minimum guaranteed
revenues and flush cash positions.
While labor issues represent an ongoing operational risk for maritime ports, it
is Fitch's view that this risk can largely be mitigated through strong contracts
with terminal operators and maintenance of adequate liquidity reserves, allowing
ports to weather short-term interruptions in operations.
The full report is available at 'www.fitchratings.com'.