Newspaper article St Louis Post-Dispatch (MO)

Kobe Quake Shakes U.S. Firms around World

Newspaper article St Louis Post-Dispatch (MO)

Kobe Quake Shakes U.S. Firms around World

Article excerpt

The day after the earthquake in western Japan, Baxter International Inc. had to deliver critical health-care supplies quickly through the crumpled streets of the teeming port city of Kobe.

The solution? "Bicycles," said Mary Thomas, a spokeswoman for Baxter, of Deerfield, Ill.

Not all U.S. businesses have such simple answers. With the key port devastated, companies in almost every industry - from computers, to cars, to chemicals - face the harsh reality of climbing shipping costs, import and export delays, or battered plants.

"This quake is going to be a major problem for world trade," said Michael Berzon, president of the Containerization and Intermodal Institute, a trade group.

Affected most, at least initially, will be shipping charges. U.S. companies could pay as much as 25 percent more in freight costs to truck supplies across Japan to other ports, said Michael Arbunich, a senior supervisor at Nippon Express U.S.A. Inc. in Brisbane, Calif.

"Anything moved in Japan is going to be costly," he said.

And paying more is no guarantee that shipments will get through on time as containers pile up on docks on both sides of the Pacific.

Once goods leave the dock, a trip that used to take one week could last twice the time, perilously long for fresh produce and other perishables.

Some companies already feel pain from the quake, which closed a port where $19 billion in U.S. products enter Japan each year. In a sign of things to come, Procter & Gamble Co. will pay $50 million to repair two damaged buildings and provide emergency housing and money to 600 employees.

Apple Computer Inc., which relies on Japanese-made display screens, could forfeit $600 million in sales, according to an estimate by Nomura Research Institute in Tokyo. Compaq Computer Corp., the world's leading personal computer maker, could lose $400 million in sales.

The most serious problems are just starting. Some shippers, such as Evergreen American Corp. …

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