port of oakland

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.

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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

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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

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

Port of Oakland Congestion Update – Truckers Beginning to Charge Waiting Time

We received a message today from one of our long time trucking partners that they will begin charging for waiting time at the terminals. They will provide two hours of free waiting time. However any additional time will be billed at $55 an hour. We have other truckers who have long since instituted a waiting time fee. We urge importers and exporters who rely on these truckers to please be patient and understanding. The truckers really are struggling to make a living as they continue having to waste more time at the terminals trying to get containers. We have been told that drivers have been experiencing wait times ranging from two to five hours.

Here’s our latest update of the four main terminals serving the port of Oakland.

1.) Ports America – This port seems to have taken over the number one ranking as the biggest offender from the standpoint of terminal congestion. Containers arriving at the port are taking more days than usual to become available for pick up. They are often times sitting in locations that truckers are not allowed to pick up at. We’ve seen containers remain unavailable for over one week (beyond the free time allowed by the terminal). Right now, Ports America is extending their free time in these situations. This has even affected containers that are subject to Customs examinations. However you do have to be careful which carrier you are using. Hapag Lloyd recently billed a customer for storage fees despite the fact that the container was not available for pick up. Also note that even once containers are available, the first available pick up appointment is usually a few days later.

I do believe some of the carriers using Ports America understands they have a major congestion issue. The past two weekends, they have had Saturday gates open to help relieve some of the congestion. They plan on opening a Monday gate on Presidents’ Day.

2.) SSA Terminal – SSA is still dealing with long wait times. Adding to the headache, SSA sent out a message today that they are dealing with chassis shortages.

3.) Ben E. Nutter – Things are hopefully going to be looking up in the coming month at this terminal. The broken transtainer was fixed last week. However we currently are still seeing delays in container availability and congestion within the terminal. Let’s keep our fingers crossed that this terminal can right itself in the coming month.

4.) Trapac – This terminal seems to have received the least amount of complaints.

Some members of the shipping community have asked whether it is worthwhile to consider Los Angeles-Long Beach as an alternative. Please note that Los Angeles-Long Beach is also facing congestion issues related to chassis shortages.

I will be attending a CBFANC town hall meeting next week with other brokers, freight forwarders and hopefully some representatives from the Oakland terminals. I will report back with news from our meeting.

We wish everyone a happy Presidents’ Day Weekend!

Jimmy Ting
Great World Logistics (GWL)
Great World Customs Service
Great World Express
218 Littlefield Ave.
South San Francisco, CA 94080
Direct: 650-308-8838
Tel: 650-873-9050 x 1019
Fax: 650-873-7029 / 7024
Skype: jimmy_ting
email: jimmyting@gwlcorp.com
http://www.gwlcorp.com

Reflections on the State of the Port (Oakland)

I was at the State of the Port dinner last night. One of the speakers was the Executive Port Director for the port of Oakland. He got grilled by the shipping community during the QA session. Frustrations really boiled over. In fact, I’m surprised he didn’t get hammered even more.
On the surface, the problem is massive congestion. The congestion affects shipping in two ways:
1.) Container availability. With too many containers in limited space, containers are often put in closed off areas. These containers are often left in closed off areas for days on end. In some terminals that require an appointment to pick up a container, the terminals don’t have enough pickup dates readily available.
2.) Drivers can wait in line first thing in the morning to pick up a container. They may get out of the terminal by mid morning. If they are lucky, they are able to return to the terminals in the early afternoon to pick up another container. They then have to wait in line. However some of the terminals are closing the drivers out early/mid afternoon (3pm or earlier in some cases). Despite waiting in line, truckers may not be able to pick up a second container if they get closed out. This type of congestion is unworkable for most truckers. Their livelihood depends on making as many truck moves as possible. The shipping community cannot find enough truckers to do the work that is available. It’s not that the truckers don’t want to do the moves, they just can’t get out of the terminals fast enough.
What I was hoping Chris Lytle would do last night was provide a serious framework for solving these problems. Unfortunately, he barely touched on the problems during his speech. I think that was partly why the shipping community really went after him during the Q&A session. What we need is an open and honest conversation with the entire shipping community. The port of Oakland is not experiencing a huge sudden huge influx of surplus containers. The port of Oakland has handled this volume before and should be able to handle it now.
Keep in mind that I am not blaming Chris Lytle for the problems. He came on board last summer and walked right into a hornet’s nest. My own viewpoint is that it ultimately starts with the steamship lines. They are doing everything they can to cut costs. These measures have put a real damper on productivity at the ports:
  • Maersk, APL, and Hanjin (three big carriers) have in the past few years stopped using their own terminals and merged in with 3rd party terminals in Oakland. Chris did acknowledge this as a big part of the problem yesterday. Consolidation of terminals is a key contributor to congestion at the terminals.
  • From talking to one of the terminal managers, the carriers are really reluctant to spend extra money on more longshoremen crews to work the ships. I don’t know if this ultimately falls on the terminals or the carriers. I do know that in the case of Evergreen, they do have some power to decide on how many crews to hire. I don’t know if more longshoremen would lead to great efficiency.
  • I learned the other day that the recent congestion at Ben E Nutter terminal was partly due to a broken transtainer. The transtainer had been broken since December. One month later, it is still broken. The terminal only had two transtainers to begin with. One is obviously not enough. The public hasn’t received any message of explanation as to why it is taking so long to get it fixed.
I have heard others in the shipping community say that the carriers really don’t mind if containers sit at ports longer. They feel that storage/demurrage charges are revenue generators for the carriers. I’m not sure if I completely agree with the argument, but I can see why members of the shipping community would feel this way.
The reality is that in the past five/six years carriers have really struggled with their profitability. What we are seeing at the port of Oakland is an example of legacy of the cost cutting measures. If service is measured by transit time and reliability, it is obvious to me that the quality of the service that carriers provide has seriously degraded.
Is there a light at the end of the tunnel? I am not sure. Chris Lytle mentioned that the port of Oakland should consider creating a Pier Pass system like the one in Los Angeles and Long Beach. The Pier Pass system would allow for before and after hours pickups. It would extend terminal operation hours from early morning to very late into the night. The cost of this system, if designed in the same way as that of Los Angeles and Long Beach, would be placed directly on the shipping community. I do believe most in the shipping community, after having spent the past half year complaining about service level at the port of Oakland, will accept this added cost.
Another related suggestion floated out there was adding a weekend (Saturday) service. Who would directly bear the cost of this service is a bit more difficult to figure out. If it requires the carriers to pay directly for more longshoremen, I can see the carriers being stingy. The track record of the carriers the past few years is that they are willing to sacrifice service, the importing community be damned.
Another x-factor in the whole situation is the ILUW (longshormen’s union). With the contract expiring on June 30th, we can be sure to expect games to be played by both sides (terminal and union) in the months leading up to the renewal.

Port of Oakland – Update on Ben E. Nutter Terminal

I’ve written and spoken with the shipping community extensively the past few months about the troubles at the port of Oakland. One issue I mentioned recently was how congestion had spread to other terminals in Oakland, beyond just SSA terminal. I learned today that the reason for congestion at Ben E. Nutter terminal is that one of their two transtainers has been broken since December. The terminal has been operating on only one transtainer for over one month. This is the reason why many containers have remained decked and unavailable for days after vessel arrival. It is also the reason why we have been unable to request wheeled containers during this time. This terminal primarily serves Evergreen vessels. Speaking with Evergreen representatives today, I learned that they don’t expect the broken transtainer to be repaired until sometime in February. Until then, we can continue to expect delays in container availability.

-Jimmy Ting

Great World Logistics (GWL)
Great World Customs Service
Great World Express

ALL Port of Oakland Terminals Continue to Operate Slowly

I’ve mentioned over the last half year about the problems at SSA terminal in Oakland. However it is important to note that SSA is not alone when it comes to causing problems for the importing community. Over the past three weeks, we have seen containers at Ports of America take over a week after arrival to become available for a pickup appointment. We recently experienced the same situation with another container at Ben E. Nutter Terminal. From talking to truckers, these problems are widespread across all the Oakland terminals.

Truckers have also advised us that they are being closed out of terminals by early/mid afternoon each day. One local drayage company, Devine Intermodal, discusses this issue in detail on their news site. If truckers are not able to pick up containers in the mid-afternoon, they will not be able to deliver the required number of containers necessary to make a living wage.

At the heart of the matter of terminal efficiency apparently is $$$.

  • Terminal operators and the steamship lines that operate them want to save money by limiting the number of longshoremen used each day as well as the amount of overtime paid.
  • Longshoremen seem to be flexing their muscles and showing their ability to affect terminal efficiency in recent weeks in the slow buildup to their contract renewal negotiations. Note that the ILWU current contract is set to expire on June 30, 2014.

The end result of these issues is that importers will have to face the following:

  • An increase in the cost of trucking if drivers are not able to deliver their usual number of loads.
  • Delays in receiving containers as the terminals remain congested.

What is unfortunate is that we do not see a solution in the near future. As the steamship lines continue to lose money in recent years, we have seen them take a number of actions to save money:

  • Slow steaming to reduce fuel cost.
  • Pushing the responsibility for chassis rental directly onto the backs of importers.
  • Limiting the amount of labor used at terminals.

All of these actions add to the total cost that importers have to pay for bringing in their products while at the same time making it very difficult for importers to expedite shipments. I urge that importers in the Oakland and Northern California community plan accordingly and adjust their expectations in the coming year.

-Jimmy Ting

Great World Logistics (GWL)
Great World Customs Service
Great World Express

 

Continued Delays at SSA Terminal, Oakland

I’ve been meaning to write about the SSA Terminal (Oakland) situation for a few months now. I apologize for not providing an update sooner. This is a long overdue posting.

I would like to say that the situation at SSA Terminal has improved since August. However the reality is that the situation is still dire. Conditions for truckers at SSA Terminal have not significantly improved. Truckers are advising us that they are taking four to sometimes even six hours to get a container out of SSA Terminal. In recent days, the terminal has been closing early in the afternoon (by 2-3pm) and preventing truckers from coming in to pick up container due to congestion. While we haven’t seen whole sections of SSA Terminal closed off for days on end as we did in July, the congestion above was enough to lead to two days of trucker’s protests on October 21 and October 22nd.

The reality is that unless conditions at SSA Terminal change drastically, we will continue to see labor disruption from frustrated truck drivers.

So what can members of the importing and exporting community do? What power do you have to effect change?

1.) Put pressure on steamship lines (carriers). They are SSA Terminal’s real paying customers. The trade community can put pressure on carriers in a number of ways. Besides voicing their displeasure with written and vocal complaints, the trade community can hit carriers where it counts. Stop booking containers with carriers if the intended vessel plans on calling SSA Terminal.

2.) Work with trucking companies and truck drivers to help compensate them for their time at SSA Terminal. I know of one trucking company that already has decided on charging a $150/container Congestion Surcharge for any container picked up at SSA Terminal. Be willing to listen to an negotiate with trucking companies if they do ask for an increase in delivery rates for containers at SSA Terminal.

In addition to being open to negotiating delivery rates, please be understanding when truck drivers are unable to return empty containers back to the terminal within the standard five day free detention time. We have already had a number of cases recently where truck drivers have had difficulty returning containers to the terminal within the standard five day detention time due to congestion at the terminals. In each of the cases, the trucking companies have asked us to help bear the cost of detention charge, and we have agreed. However this is a losing proposition both in the short and long term.

I am not confident that we will see a quick solution to the problem. I have heard nary a peep from the carriers who call on SSA Terminal. I know the new Executive Director of the Port of Oakland is working hard to find solutions. However considering the nature of the parties involved in this mess, I am not holding my breath.

-Jimmy Ting
Great World Customs Service
jimmyting@great-world.com

Oakland Terminals Open … But Movement of Containers is Slow

The Oakland terminals were open today as the protesting truck drivers did not return this morning. It looks like we are in the clear… for now.

Our information from drivers is that they have been able to get into all terminals. However the action is slow. Long waits continue. We ask for patience and understanding from importers as truckers try to clear up two days of missed deliveries and terminals/carriers have been unwilling to extend free time.

The new executive director at the Port of Oakland, Chris Lytle, has been working hard to bring a coalition of involved parties (terminal operators, carriers, truckers, the city of Oakland) together to find solutions to the problems that have created all the discontent at the ports. Please see the attached letter that was distributed to various truckers.

The following JOC article pretty much summarizes the experiences at the port of Oakland over the past seven weeks. We understand the frustration of importers and exporters at the port of Oakland. We ask again that they please not shoot the messenger (freight forwards and customs brokers) who are working hard to facilitate the movement of shipments out of ports as quickly as possible.

 

-Jimmy Ting

jimmyting@great-world.com

t: 650-873-9050 x1019