Monday, March 9, 2015

West Coast Ports Returning to Normal As Container Freight Starts to Get Up to Speed

Cargo Flowing Again After Nine Month Slowdown
Shipping News Feature

US – With tales in the press of how sailors stranded off the west coast of America play basketball and drink beer whilst waiting for the backlog of ships lying outside the ports to be discharged, it’s time to catch up on how things are progressing since the employers of the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) came to their still to be ratified agreement on the next five year contract of employment terms for dock workers. The waiting time outside the ports for the container ships before their freight can be discharged remains at two weeks for many, something which apparently little troubles the vessels’ crews, all of whom we spoke to remaining on full pay.

The Port of Oakland has reported it envisages clearing the bottleneck in about two months after the nine month slowdown ended on February 20. With terminals working day and night to get up to date the formerly strained relations between management and dockworkers appears to have mellowed now both are back to their former earnings with Oakland Maritime Director John Driscoll commenting:

"This isn't victory, there’s still a great deal of work to do, but we're seeing good collaboration between labour, terminal operators and harbour truckers and our customers will soon benefit from faster, smoother cargo flow."

As at Friday March 6 there were five ships anchored in San Francisco Bay or navigating outside the Golden Gate awaiting berths at the Port. That’s down from a high of 20 vessels in mid-February with the vessel logjam expected to disappear within ten days. Vessels are continuing to arrive late after lengthy delays at Southern California ports, a situation which could continue for a month or more as the ports of Los Angeles and Long Beach struggle with severe congestion. Shipping lines that were truncating voyages in Los Angeles to get back on schedule are now resuming Oakland calls.

Marine terminals that were overflowing with import cargo awaiting pick-up have cleared out the backlog. The Port of Oakland’s two largest terminals are operating at 50-60% percent of container yard capacity, leaving plenty of leeway to handle more volume which was down 32% in January, a fall anticipated to be reflected again when February figures are released.

In the Port of Oakland the backlog of import cargo stranded in the terminals has now been cleared with the main delay being getting the freight off the ships as the vessels queue. It may be the faster discharge rates again affect cargo release, albeit temporarily.

As far as exports are concerned tonnages were down at Oakland as Asia-bound vessels bypassed the port to recapture time lost at Southern California ports. Now that the ships are returning to Oakland, export capacity is increasing. The improvement in labour relations may mean some problems getting enough staff to continue to work at the increased rate of cargo throughput. On average, 10 ships a day are being loaded and unloaded in Oakland compared with the usual 3 to 5 vessels with the gantry cranes hitting targets up to 30 boxes per hour, close to the port’s historic average of 30 – 35.

One of the big worries at all the ports has been access to enough chassis trailers, as we highlighted last year after originally foreseeing the problem in 2010 when the FMCSA increased responsibility for the equipment with drivers having to complete a full report on the vehicles prior to collection. With the slowdown meaning that empty containers being returned to the ports were often refused, this led to a situation where many chassis trailers were effectively ‘out of bounds’ as they remained loaded with the empties.

Three companies that own the vast majority of chassis serving the San Pedro Bay ports say they activated a ‘gray chassis fleet’ of truck-trailers on March 1, a move designed to improve the flow of goods through the nation’s busiest harbour complex. Dubbed the ‘pool of pools’ the landmark agreement between Direct ChassisLink Inc. (DCLI), Flexi-Van Leasing Inc. and TRAC Intermodal clears the way for more efficient cargo operations by giving terminal operators and trucking companies at the ports of Long Beach and Los Angeles much more flexibility in obtaining chassis.

Eleven of the thirteen container terminals at the San Pedro Bay ports, as well as the off-dock rail yards, are expected to participate. The two remaining marine container terminals use their own equipment, but could opt to participate in the future. The new pact allows more than 80% of chassis’ in service at the ports of Long Beach and Los Angeles to be used interchangeably, which will greatly improve the ease and efficiency of obtaining chassis.

A team of representatives from each of the three pool operators will oversee day-to-day logistics and repositioning of more than 81,500 chassis with the pools will remaining commercially independent, with each chassis provider competing for business and setting its own leasing terms and rates. A separate third-party service provider will manage billing and other proprietary information. The process included a review by the Antitrust Division of the U.S. Department of Justice, which found:

“The increased flexibility created by the interchangeability will enhance customer service, improve chassis productivity and respond to the desire of the Long Beach and Los Angeles ports authorities to achieve better overall utilization of the region’s chassis fleets.”

Finally local California truck drivers must be happier now they are reportedly being dealt with more effectively with export boxes and empties flowing back into the docks whilst import containers are simultaneously collected. Waiting times have dropped and should only revert if the pace of discharging the ships proves too much for the subsequent infrastructure.

Photo: A shot from the Port of Los Angeles live webcam shows ships being worked on day and night.