This week mediators stepped in, “prepared and ready to render prompt assistance” to end a six-month standoff between shippers and dockworkers that has worsened congestion and problems at the Port of Oakland, CA, and across the West Coast of the US.
Transportation delays at the ports have occurred largely due to a combination of chassis and driver shortages, big ship offloading surges, and higher volumes. The two sides remain far apart on basic issues, including wages, pensions, job jurisdiction, and work rules, according to a Pacific Maritime Association (PMA) statement last week.
The Federal Mediation and Conciliation Service announced late Monday the assignment of veteran mediator Deputy Director Scot Beckenbaugh.
Under the contract, which expired in May 2014, longshore workers’ pay ranges from US$25.71 per hour for low-seniority workers with no benefits to US$35.68 per hour plus benefits for high-seniority workers. According to PMA statements, longshore workers earn on average US$147,000 a year — a figure International Longshore and Warehouse Union (ILWU) spokesperson Craig Merrilees, in an email to the San Francisco Chronicle, labelled “demonstrably false” and “irresponsible,” the newspaper said Wednesday.
Work safety is one of the issues likely to be raised by the union. Conditions have been made worse by congestion beyond its control, the group said.
Similar to the ongoing trucker dispute at Port Metro Vancouver in British Columbia, jurisdiction — who does what — probably will be an equally big issue.
2015 Challenges
As of Tuesday morning, six container ships sat idle outside the Port of Oakland, said the Chronicle. Trucks waited in line for hours at terminals, as they have done for months at ports from Los Angeles, CA, to Seattle, WA.
“Congestion and delays are at all-time highs,” said Cory Peters, vice president of drayage operations at Gardner Trucking in Manteca (San Joaquin County), which transports cargo in and out of the Port of Oakland on a daily basis. “We had one of our trucks in Los Angeles yesterday (Monday) set a record — for us — for longest time to pull out one container: 12.5 hours to bobtail into the terminal and pick up one load delivering 10 miles away in Torrance. A normal US$300 move turned into a US$1,200 move for the customer.”
In its statement, the Port of Oakland, which is not involved in the contract negotiations, acknowledged there have been “productivity declines that slowed trade flow,” especially in recent weeks, citing unresolved labour-management issues as “one of the principal causes.”
While the mediator can recommend ways to resolve the dispute between the ILWU and the PMA, he cannot force any resolutions or decisions.
The Los Angeles and Long Beach ports, the busiest seaport complex in the US, handle about 40 per cent of US imports.
Total laden container volume in the first 11 months of 2014 was only up 1 per cent from the same period in 2013, according the Journal of Commerce (JoC), which cites Pacific Maritime Association statistics.
Containerized imports through West Coast ports were up 4 per cent for that period; exports were down 4 per cent. Compare that to East and Gulf Coast ports, where total laden container volume increased 3.7 per cent from 2013. Through September, East Coast ports rose 4 per cent year-over-year, now claiming a 44.6 per cent market share.
Ports on Canada’s Pacific Coast saw a spike in cargo: Containerized imports increased 15.2 per cent in Prince Rupert, BC, and 4.9 per cent in Vancouver, BC, through November, according to JoC.
Burlington Northern Santa Fe (BNSF), the US’s second-biggest rail network, Wednesday lifted a three-day ban on moving some containers to US west coast ports, but expressed continued concern about the severe disruption that forced it into the radical step, said the Financial Times Thursday.
The railway started refusing Monday to accept 20-foot and 40-foot containers and other marine equipment from other railroads heading for export from West Coast ports. It reversed the ban Wednesday evening, saying its “westbound pipelines” had become manageable, without providing further details.
Following the BNSF announcement Monday, Union Pacific Railroad, the other major Class I railroad serving US West Coast ports, said it isn’t experiencing “any significant backlog of port freight traffic” and hasn’t imposed embargoes on intermodal cargo.
For its part, the PMA notified the ILWU Wednesday that it would reduce the number of longshore crews that will be assigned to work vessels at the ports of Los Angeles and Long Beach on the night shifts, according to a separate JoC article. The PMA says terminals have become so congested that operators would assign only one 45-person work crew, instead of the usual three.
Meanwhile, US manufacturing growth slowed in December, with continued delays at West Coast ports being cited as a contributing factor, according to the Institute for Supply Management (ISM) January 2.
Comments from companies surveyed indicated a “negative impact on imported materials shipment due to the West Coast dock slowdown,” the ISM said.
“West Coast port issues have greatly impacted our incoming materials. We are air-freighting many parts from Japan and Asia to support production while parts sit at the dock,” a producer of fabricated metal products said.
A textile mill company said: “West Coast ports are creating delays for imported goods.”
A machinery maker said: “The West Coast ports slow-down is really affecting deliveries of our Asian purchases.”
According to the ISM, economic activity in the manufacturing sector expanded in December for the 19th consecutive month, and the overall economy grew for the 67th consecutive month. But the pace of growth slowed in December, owing partly to the port disruption.
The December Purchasing Managers Index registered 55.5 per cent, a decrease of 3.2 percentage points from November’s reading of 58.7 per cent, but still in positive territory as is any reading above 50 per cent.