Sweden Braces for Port Strike That Could Cost Millions

(Bloomberg) -- Sweden is bracing for a port strike that could cost millions and disrupt supplies of everything from trucks to bananas.

A conflict that has been brewing for years looks poised to culminate in a nationwide strike by dockworkers at 16 ports from midnight Wednesday. As mediated talks to broker a deal continue, retailers, manufacturers and wholesalers were scrambling for alternative ways to secure deliveries and shipments.

Consequences could be dire for Sweden, which is already struggling to maintain economic momentum, as well as for companies such as Stora Enso Oyj and AB Volvo.

Exports account for almost half of Sweden's output, with more than 90 percent of the forest-rich country's paper and packaging production exported. The northern European country also imports a lot of its food supply, as well as clothes and consumer goods and vital components needed in its manufacturing industry.

Stora Enso, one of Europe's largest paper producers, is dependent on the port of Gothenburg on Sweden's southwest coast, and is reviewing its options to avoid delays.

“When key logistical hubs, such as the Gothenburg port, are shut down, companies that contribute to Sweden's economic growth and job creation are suffering,” spokesman Carl Norell said in emailed comments.

Costly Options

Companies across Sweden are now looking at more costly options, including using trucks and trains, to safeguard the import of goods needed for production as well as deliveries to customers outside Sweden.

“We will move goods transport to roads and rail, and we are also considering using ports that aren't affected if the strike becomes a reality,” Claes Eliasson, a spokesman at truckmaker AB Volvo, said. “Delivery delays are serious, and we're looking at how to secure inbound component deliveries as well as shipments of finished goods.”

Axfood AB, one of Sweden's largest food retailers, for now has worked around the problem and has arranged for goods from the continent to be transported by truck. "If the ports close, it will become a problem for us but we have solved it in a way that it shouldn't affect our customers,” spokesman Claes Salomonsson said.

More Radical

The Swedish Dockworkers' Union wants a collective bargaining agreement on the same conditions as the Swedish Transport Workers' Union, which also organizes workers at ports and harbors. Employers, who already have an agreement with the latter group, are reluctant to sign a new deal with the more radical dockworkers' union, which was formed in 1972 as a rank-and-file led alternative.

For now, positions appear entrenched on both sides. Employers represented by the Swedish Confederation of Transport Enterprises have offered a collective bargaining agreement, but claim that they are prohibited from making local agreements.

The dockworkers insist that it should have the right to negotiate local deals, and see the conflict as a fight for survival following years of conflict that last year led to disruptions at the APM container terminal in Gothenburg.

Erik Helgeson, a union board member, said that when employers' gave notice of an almost 5-month lockout of its members, his group was left with no choice but to call a strike.

“We see this as a purely defensive measure,” he said in a phone interview. “The employers have burned all bridges, so there's no room for us to step back.”

To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net;Niclas Rolander in Stockholm at nrolander@bloomberg.net;Anna Molin in Stockholm at amolin3@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net