congestion

Port of Oakland Terminal Congestion Continues!

March 11, 2015

No one expected terminal congestion to disappear overnight.

SSA Terminal, Oakland
Shut down Monday morning roughly around 10am due to labor disagreement.
Shut down Wednesday morning at 10:45am due to labor disagreement.
In each case, the shutdown resulted in truckers flooding to the other terminals causing long wait times for the other Oakland terminals.
Here is a timestamp diagram showing one trucker taking 4 hours to pick up a container once inside a terminal.

unnamed

Ports America, Oakland and Trapac, Oakland
Dealing with extreme chassis shortage. Both are out of BACP chassis as of today.
Lines to get into Ports America remain long. Here is a timestamp diagram showing one trucker taking 3.5 hours to pick up a container from the terminal.
unnamed (1)

BENT Terminal, Oakland
Dealing with chassis shortages. Containers arriving are taking a few days to become available for appointment.

Vessels arriving early?
On another note, we are seeing a number of cases up and down the West Coast of vessels arriving earlier than originally anticipated. This is wreaking havoc on import receiving schedules. As anticipated, truckers are fully booked at the ports dealing with the flood of containers. Congestion in the terminals is causing many containers not to be available until the last free day. Combined with the dearth of trucker availability, we are seeing many containers end up with demurrage charges due. We STRONGLY emphasize the need for patience and understanding. We are doing our best to help manage the mess.

-Jimmy Ting
Great World
jimmyting@gwlcorp.com
t: 650-873-9050 x1019

Port Congestion Update: A Moment of Relative Calm Before the Storm

February 24, 2015

As everyone is now aware, the ILWU and PMA have agreed on a contract. I have had a number of people come to me in the last two days asking if everything is back to normal. To be frank, I’m not sure if we will ever get back to “normal.” I think it is most important right now to talk about what we can expect in the coming weeks and months.

My prediction is that we will see a very short week of calm (especially in the port of Oakland) before the storm really hits. There is an enormous backlog of vessels waiting to be unloaded, most notably in Los Angeles. Now that the ILWU is back and working in full force and at productivity levels back to what was expected of them before the contract disagreement, how quickly can these terminals and the shipping community process the backlog. There is no question that there are more containers on vessels waiting in Los Angeles/Long Beach than the port can really handle at one time. The same goes for the other West Coast ports.

As the ILWU mentioned a number of times during the contract disagreement, the congestion crisis was also a result of infrastructural issues that the steamship lines must work with terminals to resolve. The flood of containers waiting to be brought into the terminals is only going to exacerbate the infrastructural issues. We saw a number of terminals close various container storage areas for days, if not weeks, during the crisis. We should expect this issue to continue to be a problem. We saw containers unable to be picked up due to chassis shortages. This may also continue to be a problem.

Importers should not expect a quick return to immediate container availability once a container gets off a vessel. While they may see this temporarily, my feeling is that it is only a calm before the full force of the vessel and container backup hits the terminals in coming weeks.

While vessel transit times should be slowly speeding up, they will not immediately return to pre-congestion time tables. We will likely have to wait months for the transit times to very gradually get back to a predictable number of days. The same goes for vessel sailing schedules. The shipping community has become accustomed to weekly sailings on designated days by various steamship lines. We should be ready carrier schedules to be off kilter for a good amount of time.

-Jimmy Ting
Great World
jimmyting@gwlcorp.com
t: 650-873-9050 x1019

West Coast Port Update: How Many Work Days Are In A Standard Work Week?

February 18, 2015

How Many Work Days Are In A Standard Work Week?

This is a trick question obviously. In Oakland, the latest tit-for-tat we are seeing this week is the ILWU deciding to hold their monthly work stoppage meeting during regular weekday working hours this Thursday rather than during night hours (standard practice). This is obviously retaliation for the PMA not employing ILWU labor over the President’s Day weekend to unload containers.

Cory Peters of Gardner Trucking explains the current situation very well in his recent newsletter to us:
ALL TERMINALS CLOSED IN OAKLAND 2/19:
The ILWU in Oakland has just announced they will be holding their monthly Stop Work meeting this Thursday during the day-shift (0700-1630).  This means all terminals at the Port of Oakland will be closed Thursday.  The IWLU holds Stop Work meetings on the third Thursday of each month in Oakland and on the first Thursday of each month in LA/Long Beach.  These meetings typically take place on the second shift (1800-0200).  It appears this week’s Stop Work meeting is in direct retaliation for the PMA not allowing them to work yesterday’s holiday and this past weekend.  Since Oakland has no night gates, this will be the 3rd full closure of the port in the past 5 working days.

PMA/ILWU CONTRACT NEGOTIATION UPDATE:
There is no update.  Both sides continue to play games while directly affecting the livelihoods of your business and ours.  Rumors continue to circulate as to what the problems are, but to date actual productivity at the port terminals remains horrendous.  As most of you know, it is nearly impossible to ship exports at this time, and those on the import side continue to see delays of numerous weeks, some over a month.  I’ve said it before, and I’ll say it again… even when a contract is agreed upon between the PMA and ILWU, there will still be serious fundamental problems with the industry which will not have been addressed.  The situation at the port terminals will be better than today, but far from where they should be.

EMPTY RETURN RESTRICTIONS:
We have seen a massive increase in the number of Steamship Lines not allowing empty containers to be returned.  For those not aware, this means import containers have nowhere to go back to once they are unloaded.  Not only does this hurt the supply of available empties for exports, the Steamship Lines are still charging container per diem for not returning the empties (even though they will not provide a return location for said empties).  This is happening much more in Oakland than LA/Long Beach.  As of today, the following Steamship Lines are not receiving empty containers, or are putting restrictions on the returns which make them nearly impossible to return (i.e. dual transactions only):

Steamship Line Port
China Shipping Oakland
Cosco Oakland
Hanjin Oakland
Hapag Lloyd LALB
Mitsui OSK Lines Oakland
NYK LALB
OOCL LALB
Yang Ming Oakland

Effective immediately, we will be adding stop-off and storage charges on all empties which cannot be returned.  These will be added to our import drayage invoices.  We apologize for having to do this, but unfortunately we cannot continue to store the Steamship Line equipment for free.  Ideally, we could charge the Steamship Lines for this, but because of the way the Interchange Agreements are written, there is currently no recourse for this.  Stop-off charges will be $100/container, storage charges will be $25/night.  Per Diem charges levied by the Steamship Lines will be passed through as we currently do.

CHASSIS SHORTAGE:
You’ve probably read about chassis shortages in the recent press releases regarding the port situation.  The empty restrictions listed above, as well as the vessel delays not allowing export loads to be returned are tying up thousands of chassis along the West Coast.  Sure, there are other issues with the current chassis model, but the majority of the chassis shortages today are a direct result of the terminals not accepting containers.  If you keep thousands of containers and chassis out of the terminals, there are not enough chassis to pick up more containers at the terminals.
______________________________________________________________

I couldn’t have written it any better. We heard over the weekend that President Obama has finally sent the Secretary of Labor, Tom Perez, to intervene, but at this point, I don’t see what good the White House can do. They sent a Federal mediator at the beginning of the year. Six weeks later, the ports are even in worse shape.

The Wall Street Journal also wrote a piece this morning talking about the damage that this port crisis is having on the economy. I am sure that each and everyone importer and exporter is experiencing the pain firsthand.

I keep wishing for some positive news.

-Jimmy Ting
Great World
jimmyting@gwlcorp.com
t: 650-873-9050 x1019

West Coast Ports Still Open … Sort of… Maybe… Perhaps… Perhaps Not…

The word of the day is ambivalence. The title of the newsletter describes exactly how I feel about the West Coast port situation. Here is what we do know.

  • We haven’t heard of a terminal shutting down through the first three days of this week. Yay!
  • The PMA indicated that they will suspend vessel operations for four days during this holiday weekend. Boo!
    • Thursday, 2/12 (Lincoln’s birthday – holiday)
    • Saturday, 2/14 and Sunday, 2/15 (Weekend – similar to what happened last week)
    • Monday, 2/16 (Washington’s birthday – holiday)
  • The ILWU has claimed that the two sides are “this close” to an agreement. Yay!
  • The PMA mentioned on Wednesday that the ILWU’s latest contract demands are ridiculous. Boo!
  • Maersk has announced more vessel sailings to Oakland will be discontinued with containers stranded in Los Angeles. Importers will have to pay for moving the containers to Oakland from their own pocket. Boo!
  • We have not seen other carriers follow Maersk’s lead on this yet. Yay!

I get the feeling that we are close to a port shut down and at the same time so close to a contract agreement. If there was certainty of a port shutdown or of a contract agreement in the coming week, importers and exporters would be better positioned to make decisions regarding how to act. However this uncertainty leaves the shipping community feeling paralyzed.

Even if a contract is agreed upon in the coming week, it is going to take months to reduce the congestion. The one thing we should continue to expect in the coming months is congestion.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

Possible West Coast Port Shutdown

It appears just as we were seeing signs of hope last week, the West Coast ports may be heading full steam towards the shutdown that we have all been fearing. CBFANC (Customs Brokers & Forwarders Association) has issued the following update from Pacific Coast Council’s Peter Friedman:

“I have refrained from spreading all the rumors, but this one has firm basis and warrants preparation:  it appears that there will be a gradual lockout this week, expanding over the weekend, and fully implemented next week. It is possible the ILWU will take some action to be the “first” to act, but the result will be the same – shut-down of the west coast.”

As of Tuesday afternoon, February 3rd, Great World has NOT yet seen any signs of a gradual lockout on the West Coast. In fact, we saw some small improvements at various terminals this past week. We are going to be vigilant and report any signs of a real lockout or shutdown.

Let’s keep our fingers crossed and hope that we are not staring at a shutdown.

-Jimmy Ting
GWL Corp.
tel: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

State of US West Coast Shipping Heading into the Chinese New Year

As we close out the month of January, I think it is extremely important for those who ship into and out of the U.S. West Coast ports to have a clear outlook of what to expect in the following months. Chinese New Year is on the horizon (February 18th) and is already impacting the shipping industry.

West Coast Terminal Congestion
Los Angeles and Long Beach ports continue to be a bottle neck. Vessels anchor outside the port waiting to be worked on and when they are worked on, it is taking over a week for the work to complete. Vessels are overall averaging two weeks or longer in Los Angeles/Long Beach. Many steamship lines have taken to “drifting” their vessels as they sail towards Los Angeles/Long Beach, as there is no point in rushing the vessels to the port if the vessels are expected to anchor and wait to be worked on.

I have heard rumors of customers paying massive amounts of demurrage / storage charges in Los Angeles / Long Beach, with one customer telling me they had a bill from their freight company for over $40,000 in demurrage fees and another customer mentioning a bill of over $30,000. I’m not sure how accurate these stories are, but they are an example of what many importers are facing as they fight to get their containers at the port. Importers are not just fighting to get containers out, but also fighting the terminals/carriers over demurrage charges.

While Oakland continues to face similar congestion, the port at least was able to go one week without a terminal closure incident. Various truckers are still refusing to go into the problem terminals, in particular SSA Terminal. However we did notice that containers arriving at Evergreen’s BENT terminal this week were able to become available for pick up within a day or two after coming off the vessel. This was a great improvement over previous weeks when we would routinely see containers be placed in closed areas for roughly a week after coming off the vessel.

Are any vessels still planning to come to Oakland?
Due to the delays in LA/LB, carrier sailing schedules are no longer able to follow predictable weekly sailing patterns. In order to try to get vessels back on schedule, many carriers have eliminated calling second ports along the West Coast. For example, Oakland has seen a drastic reduction (at least five strings have been eliminated). I have heard other carriers also are discussing whether or not to remove Oakland as a port calling. One carrier representative explained to me that the cost of sending a container from Los Angeles/Long Beach to Oakland via rail was cheaper than sailing a vessel to Oakland and having it wait at the port to be worked on. It is no coincidence then that more carriers are also discussing dropping Oakland as a port calling.

Are there any vessels to pick up containers in Asia before the CNY?
One carrier representative advised me yesterday that space on vessels departing from Asia is completely booked up through the month of February. This is due to a combination of reasons:

  • The usual surge of product departing from China before the CNY.
  • The fact that most vessels are stuck on the West Coast waiting to go back to Asia.
  • Despite the lack of vessels and abundance of cargo, carriers are still planning on skipping a week and having a “blank” sailing after the CNY.

PMA-ILWU Contract Situation
I do view the fact that Oakland went a week without a labor stoppage as a sign that the contract negotiation is finally moving forward. Assuming the two sides don’t have any massive arguments in the coming week, there is room for optimism that a contract may finally be agreed upon.

Nevertheless, even when the PMA and ILWU agree on a contract, it is going to take months to unwind ourselves from this mess at the ports.

If you have space confirmed with a carrier, I highly recommend that you don’t mess around with it. I have had various importers and exporter come to me complaining about the listed transit times on containers that we have booked. In light of the vessel availability situation, the top priority for every importer should be just getting product out during the month of February.

Let me know if you have any questions.

-Jimmy Ting
Great World
jimmyting@gwlcorp.com
t: 650-873-9050 x1019

Are We On The Verge of a Complete West Coast Port Shutdown?

Update on Port Conditions

I don’t want to be the boy who cried wolf, and I certainly have been ringing the alarm often these last few months. However recent actions at the West Coast port terminals have undeniably put us right on the brink of a complete port shutdown. With all three major ports areas (Seattle/Tacoma, Oakland, Los Angeles/Long Beach) discontinuing longshoremen labor at night to unload containers off vessels, the port conditions will only continue to get worse.

In the past few weeks we have seen the following:

  • SSA and BENT terminal in Oakland shut down last Thursday due to disagreement between the ILWU and PMA..
  • Five strings calling the port of Oakland have been eliminated. This will significantly decrease the capacity coming to Oakland. Those with containers on vessels that eliminated the Oakland port calling will have containers railed to the port of Oakland from the port of discharge.
  • Vessels continue to sit at the port of Los Angeles/Long Beach for multiple weeks before departing.
  • Containers that are unloaded from vessels have an increased likelihood of being put into a closed area.
  • Steamship lines and terminals are in some cases barely extending any free time when containers are put into closed areas.
  • Some terminals are refusing to accept empty container returns for extended periods of time.
  • For export shipments, some terminals are refusing to accept loaded containers that are ready to be delivered to the terminal. This only acerbates the chassis shortage problem as many of these loaded containers are sitting on chassis that are much needed on the import side. One of our trucking partners indicated to us that they have over 300 loaded export containers sitting in their yard or at their customer’s dock waiting for the terminals to accept them.

I mentioned that the PMA and ILWU agreed to Federal Mediation at the beginning of the year. Mediation was supposed to be accompanied with a news blackout. However both the PMA and ILWU have been trading public attacks leading us to believe that mediation is not working.

My feeling is that the next step will be a complete port shutdown. There’s no where left for the situation to progress to. One local carrier representative mentioned to me that we should pull out from the ports as many containers as we can right now as a shutdown could happen any moment. I found this comment amusing as no one is holding back on pulling out containers. We’ve been desperately trying to get containers out as quickly as possible these last few months. The trucker who has 300 export containers waiting to be returned to the terminal also believes that this situation cannot go on for long.

Monday, January 19th, is MLK holiday. Some terminals are open. Others will be closed. A few will be open in limited capacity only. One less day to pull out containers will not help.

I hope I am wrong about a shutdown, but all signs indicate that we are sitting on the precipice and staring straight at a shutdown.

What alternatives do shippers have?

Many shippers have come to me asking me what alternatives they have.

  • If they have the ability to ship to the East Coast or perhaps to Houston, this is an alternative. Note that transit time is long (but perhaps not as long as having to wait it out at the West Coast ports). Furthermore, capacity on vessels to the East Coast is also very tight.
  • What about Canada? If you ship to the Midwest, you should undoubtedly be looking at rail through Vancouver or Prince Rupert as an alternative. However for those on the West Coast, is Vancouver really a viable option? The product would have to be removed from the container and transloaded onto a trailer before being trucked to the most locations in the United States. I recently priced this service out with a few various truckers. The current rough estimated cost to get a container of product from Vancouver to the San Francisco Bay Area would be somewhere between $4500 and $5000. There would be some variation depending on the size of the shipment and whether or not the product floor-loaded or palletized. This is a very rough estimate that could certainly change in the coming months/
  • What about air freight? This would have to be a last resort as air freight rates will assuredly surge during this time.

We will be watching this situation closely and providing updates as we receive them.

– Jimmy Ting
Great World
jimmyting@gwlcorp.com
t: 650-873-9050 x1019

Truck Protest at the Port of Oakland Today (Monday, December 8, 2014)

Conditions at the West Coast port terminals have seriously deteriorated in past weeks. I have been writing about how horrible conditions have become awful in the past month. Apparently, drivers at the port of Oakland have had enough. We received a message last Friday from one local trucking company that drivers at the Oakland port were intending to protest at the port terminals today, Monday, December 8th. We have confirmed this morning that many trucking companies are indeed facing a protest. Here is a message from one our local drayers:

Today , drivers have not shown up for work  in support of the truckers work stoppage  against the unreasonable delays at the terminals and to highlight their complaints against Union workers. We have learned that numerous drivers, including our own independent contractors, have agreed not to work , either to join their support to the protest, or out of fear for their safety.. Moreover, several transportation companies will not be sending their drivers to the terminals on the day of the protest.

This protest at the port of Oakland is unfortunate in timing, but should not come as a surprise. We have seen the West Coast terminal situation become absolutely unbearable as truckers are not able to consistently get into the terminals to pick up and return containers.

I would like to also share a snapshot of messages we have received this past week from what we consider to be some of our long standing most trusted trucking partners along the U.S. West Coast.

  • “There most likely will be demurrage charges for this container. We will only accept if you guys guarantee demurrage for however many days we need to pull container. Also, once your container becomes available, we won’t be able to schedule until the LFD. We have too many demurraged containers at the moment. Please confirm. Thanks”
  • ​”Well received and even we got the order days ahead before the arrival, there’s no sufficient time to pull out containers from terminals. Due to terminals congestion, we don’t guarantee pickup of containers on or before the LFD​​. Please provide allowance for additional chassis usage because we’re havi​​ng problems on the return too.  Thank you.”
  • “Notes:  Due to the current situation at Oakland Port, we will not be ​responsible for DEMURRAGE CHARGES if container​ ​is not p/u before the last free date​. In order to process the order and assured that we received the document we​ ​will acknowledge receipt of your order by providing a REFERENCE#. If we do​ ​not reply, please contact us immediately”​

The reality is that there is no guarantee these days that a driver going into a terminal will be able to get out of a terminal in any reliable time frame, if at all. In the past, trucking companies were able to schedule drivers to arrange pickups and deliveries ahead of time with a basic amount of certainty. However under current conditions, trucking companies are having to turn away pick up and delivery requests because they just cannot be sure their drivers will be available to successfully get into a terminal. If the trucker does accept the delivery order, they are requesting that we provide a flexible time frame for actually retrieving the container. This means that there WILL be a possibility that a container may not be picked up until AFTER the last free day. This means there may be BOTH demurrage charges to be paid to the terminal AND waiting time charges to be paid to the trucker. In the case of the port of Seattle and Tacoma, we ask that importers be aware that trucking companies are having extreme difficulty even returning empty containers. This can lead to storage and detention charges on empty containers.

Many of our long time trucking partners have turned away a large amount of business in recent months. This turning away of business has only accelerated in recent weeks with various truckers already stating they are booked through much of the month of December.

I have been pleading with our customers to be patient and flexible in this time. If we are assisting you with your trucking moves, this means that we ask that you be understanding if we indicate that we are looking for drivers that can assist with a delivery. You may find that we are using alternative trucking companies outside of normal ones you are used to working with. We ask that you be understanding if we indicate that there may be demurrage and/or special waiting time/congestion charges associated with a pickup.

Great World is first and foremost a service company that has the best interests of our customers at heart. We value our long term partnership with our customers and believe strongly in building mutually beneficial relationships. This is an extremely trying time. We ask that you work with us as well as the trucking community to get through it.

If you have any questions, feel free to contact me.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
jimmyting@gwlcorp.com

Port Congestion Surcharge Postponed (Update – November 19, 2014)

As reported late yesterday, carriers began announcing that they were postponing the Port Congestion Surcharge. We received confirmation today from all remaining carriers that had announced a PCS that they would be postponing the fee. The reason for the postponement is apparently due to intensive scrutiny from the FMC. The FMC sent out a notice on November 17th that they would be closely reviewing the application of the PCS.

The fact that the carriers have postponed the PCS gives a brief breather to importers who are now seeing their containers finish arriving at the peak of the shipping season. However importers and exporters should not assume that the PCS has gone away. From reports, carriers seem intent on finding a way to charge the PCS. Carriers are still sustaining losses due to the extreme congestion they are facing at U.S. West Coast ports. Whether it is through a formal PCS or a General Rate Increase, carriers are looking for ways to pass along the added operation cost that has resulted from the port congestion. In fact, two carriers (Matson and Wan Hai) have given specific dates (Dec.3 and Dec.18th respectively) for charging the PCS again. Those dates will apply based on discharge dates at the destination port. I would not be surprised if other carriers follow this lead and announce a PCS to be implemented sometime in mid-December.

In the meantime, terminals continue to operate slowly. One week away from the Thanksgiving holiday, there is no real timeline for improvement.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

Carriers Begin Collecting Port Congestion Surcharge (PCS) as USWC Ports Continue to Teeter Along, November 14, 2014

Carriers Begin Charging Port Congestion Surcharge
As expected, steamship lines have begun announcing that they will begin charging the Port Congestion Surcharge. We received announcements from the following carriers that they will begin charging the PCS for all containers arriving at U.S. West Coast Ports on or after November 17, 2014.

  • Evergreen
  • Hyundai –
  • CMA-CGM
  • Hanjin
  • NYK

The amount of PCS that we are seeing applied to IMPORT containers is currently as follows:

  • $800/20′
  • $1000/40′
  • $1125/40’HQ
  • $1266/45’HQ

The original PCS that most carriers announced gave them the latitude to levy the charge on containers at all U.S. ports. However currently, the announcements we have seen are only applying to West Coast IMPORT containers. We are expecting most of the other carriers to join in and begin collecting the PCS.

For EXPORT containers, thus far we have only seen Evergreen announce a PCS ($240/20′, $300/40′, and $375/45′). I would imagine other carriers might be joining in to announce a PCS on export containers as well.

Current Status of the USWC Ports
The USWC port terminals are open and operating today. Reports have come out that the Teamsters have been striking at six Los Angeles / Long Beach terminals. However thus far, the ILWU has not honored the picket line and have kept the terminals in Southern California open.

In Oakland, all four major terminals are open today. SSA remains a terminal of concern as we have seen the terminal close twice in the past week. Heavy congestion and backlog remain.

The PMA sent out the following message yesterday, critical again of the ILWU’s behavior in recent weeks. With this message, we are seeing a continued escalation of tensions at the USWC ports.

We are still monitoring this situation closely and will provide updates as soon as we receive them.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com