Ships back up at US West Coast ports after night vessel work ends

Ships are backing up rapidly at the major West Coast gateways following a decision by employers to stop working vessels at night in order to concentrate on clearing out congested marine terminal yards.

The Marine Exchange of Southern California reported today that 13 container ships were at anchor and awaiting berthing space in Los Angeles-Long Beach. Oakland reported that 7 container ships were at anchor and Tacoma also reported seven container ships at anchor. Although the ports have had vessel backups since last fall, the numbers are now accelerating.

Congestion began to mount at West Coast ports last summer due to a spike in container volume, chassis shortages and dislocations and service degradation on the intermodal rail networks. The knockout punch came at the end of October, according to the Pacific Maritime Association, when the International Longshore and Warehouse Union implemented a policy of work slowdowns and refusals to dispatch sufficient skilled labor to perform yard work in order to gain leverage in the ILWU-PMA contract negotiations.

Port executives today say that most of the container terminals are now at 90 percent of capacity, or higher, which they say puts the terminals on the brink of gridlock. Unless containers can be removed from the yards, the facilities eventually will reach the point where they can no longer accept more containers from the vessels.

Therefore, employers toward the end of 2014 began to reduce the number of work crews, or gangs, assigned to unload vessels on the night shift. They gradually cut back on vessel work at night, and by Wednesday this week, all vessel work at night had been discontinued in Seattle-Tacoma, Oakland and now Los Angeles-Long Beach.

Employers said this policy helps the terminals in two ways. With no containers coming off the ships at night, the terminals are able to devote all of their resources on the night shift to cleaning up the yards and making space for containers that will be discharged from the vessels the next morning.

Also, according to the PMA, the ILWU for the past 10 weeks has refused to dispatch sufficient skilled labor to operate yard cranes. Therefore, although the ILWU has stated that it makes hundreds of workers available for each shift, the refusal to provide sufficient yard crane operators effectively renders some gangs useless. By eliminating vessel crane work opportunities at night, employers hope there will be more yard crane workers availabe for day and night shifts.

“This decision was not made lightly,” said PMA spokesman Steve Getzug. “The ILWU’s ongoing refusal to dispatch sufficient yard crane drivers, the very workers who can best clear congestion at Los Angeles-Long Beach, led to PMA’s decision to halt night vessel work. It is essential to deploy every available crane driver to relieve the crushing congestion on the docks,” he said.

The ILWU disputes the employers’ reasoning. Adan Ortega, spokesman for ILWU Local 13 in Southern California, noted that terminals have been steadily reducing vessel gangs from as many as eight on the biggest ships in July to three gangs after July to one gang beginning New Year’s Eve and now to zero on the night shifts in Los Angeles-Long Beach.

“By my calculation, that is over an 85 percent reduction in the overall workforce since July. By what stretch of the imagination would anyone think that the congestion that existed before the contract would not worsen?” he said.

Carriers knew their vessels would back up at the ports as labor was pulled from ship work at night. In fact, carrier representatives dominate the PMA board of directors, so they factored heavily into the decision-making process. However, employers see this as a last-ditch effort to avoid even more draconian measures, such as an employer lockout such as occurred in the 2002 contract negotiations. Some employers are reportedly considering a lockout to be a viable option as shipping lines and terminal operators continue to bleed cash.

Furthermore, by cutting back on work opportunities for longshoremen, especially the skilled equipment operators that earn more money than those dockworkers without such skills, employers hope that the rank-and-file will pressure ILWU negotiators to resolve the outstanding issues with the PMA and reach a settlement. A major issue yet to be resolved concerns ILWU jurisdiction over chassis maintenance and repair. However, the vast majority of longshoremen have no stake in issues involving ILWU mechanics.

The lengthy contract negotiations, and now the backlog of vessels at West Coast ports, have proved to be quite costly for shipping lines. Today’s big ships cost more than $100 million each. Carriers estimate they lose more than $40,000 each day that a vessel sits idle. There is also the frustration expressed daily by their customers whose merchandise is sitting on the vessels that are stuck at anchor rather than on the store shelves.

Maersk Line spokesman Tim Simpson said the company is focusing on those factors that it can control. Maersk is in constant contact with its customers and vendors, informing them of the steps that are being taken to discharge the containers and move them from the terminals, and providing customers with updated information on delivery times.

Likewise, the terminal operators are doing what they can to clear the container backlogs so the vessels can be worked as quickly as possible and the gate operations will be improved, said John Cushing, president of PierPass Inc., which represents the 13 container terminals in Los Angeles-Long Beach. In addition to the normal five weekday gates, four night gates and one Saturday gate that are now standard operating procedure in Southern California, most of the terminals have added extra night gates as well as Sunday gates to help relieve congestion being experienced by truckers, Cushing said.

In December, the terminals ran 72 additional gates beyond the normally scheduled 10 gates they operated each week under the PierPass program, he said.

Carriers are also beginning to look at extraordinary measures to avoid congestion on the West Coast, with at least one line supplementing its regularly-scheduled weekly all-water services to the East Coast with ad-hoc sailings of additional ships, known as extra-loaders, on all-water services to the East Coast.

NY-NJ truckers: New year, same chassis problems

New York-New Jersey port truckers say chassis shortages and dislocations have continued into 2015 while industry officials work to develop a port wide pool of interchangeable “gray” chassis by mid-year.

Truckers at Tuesday’s monthly meeting of the Association of Bi-State Motor Carriers said chassis shortages have worsened since the holidays.

Several drayage company officials said their drivers are forced to scrounge for chassis and accept defective units that must be repaired before they can be taken on the road.

“We’re spending half a day just to get a chassis that we’ve paid for,” said John Kruse, owner of J-Way Co. in Hillside, New Jersey. He said waiting on the repairs is a waste of drivers’ time and is akin to renting a car, then having to take it to the shop for an oil change.

Container lessors blame shortages of International Longshoremen’s Association mechanics at terminals, equipment dislocations following the holidays, and hoarding of equipment by truckers worried about chassis availability. Lessors say they’re paying copious amounts of overtime to mechanics, and are bringing in newer chassis to replace worn-out units.

Chassis have been a source of contention since most ocean carriers began exiting chassis ownership and transferred their chassis to leasing companies. The transition, which began five years ago, has been bumpy, especially in port areas such as New York-New Jersey and Los Angeles-Long Beach.

New York-New Jersey chassis problems have been aggravated by shortages of mechanics, especially at marine terminals. Terminals’ mechanics often are pulled away from basic readability repairs and reassigned to more-urgent tasks such as work on refrigerated containers.

Beth Rooney, the Port Authority of New York and New Jersey’s assistant director for port performance initiatives, acknowledged the difficulty that truckers face with chassis but said the planned portwide chassis pool should alleviate many of the problems.

The Council on Port Performance, an industrywide group working to implement recommendations of a port performance task force, will launch the port wide pool by the middle of this year.

The pool will be centrally managed, and will allow full interchange of chassis among the three lessors that now provide most chassis in the port. Other chassis providers also could participate in the gray pool.

“We’re all aware of the problems,” Rooney said. “Is there a plan in place? Yes. Is it taking longer than we’d like? Yes. But we’re we’re making good progress toward having a gray chassis pool. I can see the horizon now.”

Marisol International News Bulletin; Carriers Temporarily Omit Oakland Port Call

Carriers Temporarily Omit Oakland Port Call

Due to severe congestion and unresolved labor issues at the Port of Oakland, select carriers have announced they will omit the Oakland port call until further notice. According to reports, 10 to 15 ships are anchored in the San Francisco Bay daily awaiting berths at Oakland marine terminals. As a result, carriers have amended vessel schedules in an effort to relieve congestion.

UASC stated it will temporarily omit the Port of Oakland on all future AWS1, AWS2 and AWS3 vessels until further notice. Import cargo already in possession with an Oakland port of discharge for the AWS1, AWS2 and AWS3 vessels will be delivered to Oakland. UASC will continue to call the Port of Oakland for AWS4 vessels. Oakland cargo will only be accepted to and from: Fuzhou, Xiamen, Nansha, Hong Kong and Yantian.

Additionally, Hapag-Lloyd notified customers earlier this week that the Oakland port call will be temporarily suspended for its WAN service. The first vessel not to call at the Port of Oakland will be the Cap Pasado V.920N/924S, with an ETA into Oakland of February 6, 2015. All Oakland import cargo currently loaded on this vessel will be discharged in Vancouver, BC to connect to a feeder with an ETA into Oakland of February 10, 2015. It has been reported that Hamburg Sϋd, Maersk Line and ANL-USL will also omit Oakland port calls. Due to vessel sharing agreements, the above stated changes will impact additional ocean carriers’ vessel schedules as well.

Furthermore, the ILWU will hold their monthly Union Meeting today. As a result, there will not be any work during 2nd shift within the Port of Oakland. The in-gate will close at 3 pm to ensure all trucks inside the terminal will be serviced.

Marisol International / Wwl will continue to provide important vessel schedule changes through news bulletins. If you have any questions or concerns, please contact your local Marisol / Wwl International account manager.

ILWU-PMA trade painful blows as talks reach eight-month mark

Longshore contract negotiations on the U.S. West Coast have degenerated into a war of attrition in which the union’s work slowdowns have significantly increased operating costs for shipping lines and terminal operators, and the employers are countering by reducing work opportunities for rank-and-file longshoremen.

Caught in the middle are the ports, whose reputations have been tarnished, truckers, who sit idle in long lines, often without compensation, and cargo interests, whose cost of shipping through the West Coast has skyrocketed.

Conditions are so bad that some employers say the only way to stop the bleeding is to lock out the union as they did in the 2002 contract negotiations. However, those employers are still outnumbered by others who say that everyone will lose in a lockout, and a war of attrition is the better option.

The contract negotiations, which began on May 12, are now in their ninth month. Shipping lines and terminal operators, who are represented by the Pacific Maritime Association, can no longer afford the increased operating costs that result from work slowdowns by the International Longshore and Warehouse Union. According to numbers published each week on the PMA website, terminal operators are paying 15 to 20 percent more man-hours than they did in the same weeks last year, but cargo volumes are up only about 1 to 3 percent, depending upon the port range.

Shipping lines are suffering as well because vessels are taking as long as one week to work, when cargo should be discharged and loaded in no more than three days. Carriers say they lose at least $50,000 each day that their vessels are idle. According to the Marine Exchange of Southern California, seven containerships were at anchor Tuesday awaiting berths. In Oakland, the port reported that eight container ships were at anchor.

The strategy of ILWU negotiators apparently is to make the hard-timing so costly for individual employers that they will cave in to the union’s demands on unresolved issues involving automation, and also jurisdiction over chassis maintenance and repair. The ILWU hopes the individual companies will pressure PMA negotiators to grant the union’s demands. Last month, ILWU President Bob McEllrath said the negotiations would reach a successful conclusion only when shipping lines became directly involved in the contract talks.

Employers have taken the offensive by cutting back on work opportunities for longshoremen. Terminal operators in Seattle and Tacoma have not opened for night shifts for several weeks now. Oakland’s terminals no longer work vessels at night, although they continue to employ longshoremen at night to organize containers in the yards. When longshoremen refuse to dispatch enough workers, especially equipment operators, to fill a gang, employers dismiss the gang within one hour so the workers don’t have to be paid.

Terminal operators in Los Angeles-Long Beach caused a stir on New Year’s Eve when they informed the ILWU locals in Southern California they were reducing the number of vessel work crews at night to one, from the three 45-member gangs that had been loading and unloading ships. Employers went a step further on Monday when they informed the ILWU locals that beginning today there would be no gangs hired to work vessels at night, although yard and gate operations would not be affected.

According to letters from the PMA to the ILWU locals, these actions make good operational sense. PMA stated that since the ILWU in Southern California on Nov. 3 unilaterally decided to reduce from 110 to 35 the number of skilled yard crane operators that would be dispatched each day, the container yards had become so congested there was no space left to accept additional containers at night. Therefore the terminals would stop discharging containers from the ships at night, and would use the night shift to relieve congestion in the yards.

PMA spokesman Steve Getzug said Tuesday that reasoning is still valid. “Our sole rationale for the adjustments in night operations at L.A. and Long Beach is to free up crane drivers to clear the yards. It’s that simple.”

However, at least in the thinking of some employers, reducing work opportunities at night at all of the ports also hits the rank-and-file longshoremen in their pocketbooks. Many longshoremen like nightwork, which carries premium pay, and they reportedly care very little about the union negotiators’ stance on chassis maintenance and repair, which is one of the issues preventing negotiation of a new contract.

ILWU negotiators want the PMA to guarantee the union M&R division, which accounts for about 10 percent of the ILWU membership, the right to inspect every chassis before it leaves the terminal. This is no longer possible because the shipping lines sold their chassis to equipment leasing companies, and those employers are not members of the PMA. ILWU negotiators want jurisdiction over “red-lined” terminals that years ago signed M&R contracts with other unions such as the International Association of Machinists. The PMA can’t make any such guarantee because they have no control over those contracts. ILWU negotiators want PMA to grant the ILWU M&R jurisdiction at off-dock locations run by the chassis-leasing companies, but the PMA has no jurisdiction over the off-dock sites.

Some rank-and-file longshoremen are reportedly upset over losing work opportunities on the night shifts because union negotiators are holding up contract approval over M&R work that is performed by ILWU mechanics. Employers hope that those general longshoremen pressure the ILWU negotiators to back off on chassis demands that the PMA can not grant even if the employers’ group chose to do so.

Just as the PMA will not discuss bargaining strategy, the ILWU does not do so either. In recent statements, and in letters to the PMA, the union has attacked he employers’ decisions to cut back on night work as being bad for productivity at the ports. In a letter Monday to the PMA, the president of the three ILWU locals in Southern California said the decision to cease all vessel operations at night would not improve productivity.

“There is no evidence that there has been any effort to reallocate labor to clearing the yard,” said Bobby Olvera, president of ILWU Local 13. “We ask you to reconsider this unilateral action. It is not a sound management decision and will inflict direct damage on the industry and to retailers large and small. In the interim, ILWU Local 13 will continue to fill any orders for night-side vessel gangs it receives,” Olvera said.

Meanwhile, the war of attrition continues. The PMA, in a release on Monday, said: “The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks.” The PMA said that statement should be taken at face value, meaning the terminals are approaching complete gridlock. Others say is a not-so-subtle warning that if the slowdowns continue, the voices within the PMA calling for a lockout of the ILWU will get louder and will soon outnumber those who oppose a lockout.

It is generally agreed that no one wants a lockout. Rank-and-file longshoremen would receive no paychecks because they won’t be working. Terminals will forego revenue because they won’t be lifting containers on and off of ships, and shipping lines will lose thousands of dollars a day because their vessels will sit idle at anchorage. Furthermore, a lockout and the inevitable Taft-Hartley injunction that would follow would only prolong the agony because the work slowdowns would most likely continue.

On the other hand, cargo interests and shipping lines based in other countries seek action after eight months of inaction in the negotiations, and rank-and-file longshoremen are seeing their earnings diminish each week as employers reduce their hours, so each group is pressuring its respective negotiators to end what they consider to be complete nonsense.

PMA statement ‘ominous’ in pointing to possible lockout

Could the industry be approaching a point of no return in West Coast longshore talks?

The acrimony between employers and the International Longshore and Warehouse Union has only grown worse since a federal mediator was called in on Jan. 5 with high hopes that the agency practiced in bringing warring sides to the table would achieve a settlement after almost nine months of negotiations.

Yet even the parties are saying that since the mediator arrived no progress has taken place.  “Since the mediator joined the talks, no further agreements have been reached and ILWU work slowdowns have continued to the point where many terminals are in peril of complete gridlock,” the Pacific Maritime Association said in a statement released late on Monday.

But it’s not just that nothing has improved since the mediator joined the talks. The PMA seemed to be saying that the mediator’s presence hasn’t worked and that additional steps to achieve a resolution may be necessary. “The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks,” the employer group said.

That statement, a distinct change in the language the PMA has used in prior statements, seemed to point to something new afoot. Some believe that something is a lockout, where the union is locked out of terminals by the employers are all cargo movements come to a complete stop.

“I think that their last sentence was a very ominous one and a lockout is where it’s pointing to,” said Jock O’Connell, an international trade economist affiliated with Beacon Economics in Los Angeles, who tweeted to that effect on Monday. “Why else would they say that they are alerting port authorities? Who was this press release addressed to, the media, the union, the federal mediators, or the port authorities, that they could expect some summary action very quickly?”

Many in the industry recall the ten-day lockout in the fall of 2002, a rude awakening which led thousands of importers and exporters to diversify their international supply chains to ports in Canada and the East and Gulf coasts to avoid over-reliance on ports on the West Coast.

Calls to West Coast port authorities could not confirm what if anything the PMA has communicated to the port authorities.