lockout

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

West Coast Ports to Temporarily Suspend Weekend Vessel Operations

February 6, 2015

After the PMA’s announcement earlier this week that West Coast ports are on the verge of an involuntary port shutdown, we maybe seeing the process slowly playing itself out. The PMA announced today that terminals would not be hiring labor this weekend for vessel loading and unloading. Terminals had already a few weeks ago discontinued night operations for vessel loading and unloading. For the terminal operators, it didn’t make sense for them to be employing labor to remove containers into already congested terminals. This announcement will only further delay cargo arriving at West Coast ports. Note that labor will still be used for basic yard, rail and gate operations.

Another indication of how close we are to a complete terminal shutdown is the fact that numerous terminals are not allowing return of empty containers. In such circumstances, will the carrier charge for detention fees? Who will pay for the chassis rental fees for each day the container sits outside the terminal with a chassis? Won’t this only exacerbate the chassis shortage issue? How LONG will terminals delay the receiving of empty containers?
___________________

Carriers beginning to declare Force Majeure?
Maersk made a decision this week to drop all Oakland bound containers on the DS National v.503 in Los Angeles/Long Beach. While other carriers have made similar decisions a number of times over the past month, the difference this time is that Maersk is terminating the shipments in Los Angeles/Long Beach and will not be responsible for moving the containers up to Oakland. With previous instances this past month, carriers have decided to rail the Oakland containers from Los Angeles/Long Beach. However by terminating the containers in Los Angeles/Long Beach, Maersk is in effect declaring Force Majeure. Maersk has made a similar decision with Oakland bound containers on the Gudrun Maersk, which has not yet arrived in Long Beach.

Importers with containers on these two vessels will be forced to arrange their own transportation of the containers up to Oakland. What makes this current circumstance so troublesome is the following:

  • Maersk is requiring that the empty containers be returned to the terminal from which it was picked up.
  • However the terminal is incredibly congested and from what we have heard is unable to receive a return empty container.

Importers are therefore facing a no win situation. They can pick up a container, but face possible detention charges and chassis rental charges. Or they can leave a container inside a terminal and face demurrage charges. All of the above is assuming that a trucker can even be located who is able to pick up the container.

Assuming other carriers begin following Maersk’s decision above, we can only expect to see even more container congestion in Los Angeles/Long Beach.

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

PMA Provides Clarity on a Possible Port Shutdown

PMA Provides Clarity on a Possible Port Shutdown

Wednesday, February 2, 2015

As mentioned yesterday, rumors are flying around that West Coast ports will begin shutting down gradually this week (either via lockout or strike). This afternoon, James McKenna, President and CEO of the Pacific Maritime Association, the organization negotiating on behalf of the steamship lines and terminal operators, sent out a public video message. The message spells out the following:

  1. The impact of slowdowns at the terminals the past three months has reach critical levels.
  2. The offer that the PMA has presented on the table for the ILWU is more than fair. This is the first time that details of the offer have been made public. Detailed information regarding negotiations have been heretofore subject to a news blackout.
  3. A line is being drawn in the sand. McKenna seemed to imply that there is impending gridlock and that if the ILWU doesn’t act to approve the latest offer on the table, there is nowhere left to go other than a work stoppage.

The ILWU has not yet responded to McKenna’s public statement. However what we are seeing here is a tension ratcheting up, not down.

I will continue to provide updates as we receive them.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
jimmyting@great-world.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

Crisis at West Coast Ports

BREAKING NEWS Update: 5pm, November 7, 2014

Los Angeles / Long Beach – 4 of 11 terminals shut down today due to ILWU walkout

Oakland – SSA Terminal shut down today at 2pm due to ILWU walkout

I would be surprised to see longshoremen working on Monday. Let’s keep our fingers crossed and hope for the best.

_____________________________________________

For months now, importers and exporters at U.S. West Coast ports have been dealing with massive congestion that has only gotten worse during the peak season. There are quite a few articles written recently detailing the numerous contributing factors that have led to the current logjam at the ports. Of these factors, the one that now threatens to tip the ports from massive congestion to complete standstill is the ILWU – PMA contract stand-off.

The ILWU has been working without a contract since July 2014. The ILWU and PMA have maintained press silence since that time. However the PMA broke the silence when they announced earlier this week that the ILWU was purposely slowing down productivity in the Pacific Northwest ports (Seattle / Tacoma). This slowdown purportedly began last weekend.

What is more dangerous, if what we are hearing is true, is that similar slowdown tactics have spread to Los Angeles / Long Beach terminals in recent days. Los Angeles / Long Beach terminals are already on the verge of collapsing under the weight of all the containers they are trying to process. We already have seen regular vessel delays in Los Angeles of at least a few days for each vessel.

The greatest fear right now is that if the slowdown does spread, the PMA and terminal operators may feel that they have no alternative but to lock out the ILWU. This would lead to a disastrous port shutdown, similar to the one experienced in 2002.

Importers and exporters are advised to ship with extreme caution and understanding of the fragility of the current situation at the U.S. West Coast ports. Those who have the option to ship via other ports would be wise to begin doing so until this current unrest settles.

The situation is one that may be changing daily. I will keep everyone updated. Let’s keep our fingers crossed and hope for the best.

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