The Good, the Dangerous, & the Ugly Affecting Shippers at West Coast Ports

Don’t look now, however Black Friday is subsequent week and so many shippers are considering they’ll should get fortunate to obtain their imports and have merchandise on cabinets for the vacation season.

If luck performs an element in operations going easily at ports, then ports haven’t been fortunate shortly. Congestion on the West Coast ports, particularly the Ports of Los Angeles and Lengthy Seashore, have dominated worldwide delivery information. Each time you have a look at delivery information, issues appear to be worse.

Lastly, this week has introduced some good delivery information for shippers. Nonetheless, there’s nonetheless loads of unhealthy when trying on the port congestion scenario and loads of ugliness between the Pacific Maritime Affiliation (PMA) and the Worldwide Longshore and Warehouse Union (ILWU) as shippers really feel like their cargo is a hostage in contract negotiations.

So in at this time’s weblog, we take a fast have a look at the Good, the Dangerous, and the Ugly within the information surrounding West Coast port congestion that’s affecting shippers. That there’s a “good” part suggests the tides of fortune could also be beginning to flip within the favor of ports and shippers.

Right here to assist us have a look at the great, the unhealthy, and the ugly is Clint Eastwood. Okay, that final sentence isn’t true, however you possibly can think about his voice studying this weblog to you if it makes you’re feeling higher. Do you’re feeling fortunate? Nicely, do ya, port?

Port Congestion Surcharge Postponement:

Carriers have postponed Port Congestion Surcharges (PCS) that most often have been going to price shippers $1,000+ per container.

Shippers even have themselves to thank for this one. Backlash from shippers was so pronounced, the Federal Maritime Fee (FMC) acquired concerned and carriers backed off on the charges. PCS haven’t been cancelled altogether, however carriers have introduced PCS is not going to be applied till additional discover.

Although PCS haven’t been fully faraway from the image, there’s a respectable probability they won’t go into impact in any respect. If carriers by no means get their PCS going, anticipate a sequence of Basic Price Will increase (GRIs) sooner or later to attempt to make up for prices related to port congestion (possibly that sentence ought to have gone within the Dangerous part).

Additional Storage to Relieve Congestion:

The Port of Lengthy Seashore has been severe about discovering options to the congestion disaster occuring there. Final Thursday, the port’s board authorised additional space for storing that can be operated by a non-public firm as a “Momentary Empty Container Depot” which might considerably assist the congestion on the port.

Right here’s how it’s described within the launch asserting the space for storing from the Port of Lengthy Seashore:

Appearing to alleviate cargo supply delays, the Lengthy Seashore Board of Harbor Commissioners on Thursday authorised using Port of Lengthy Seashore property as a short lived web site for the storage of empty containers, which can assist to liberate wanted gear to maneuver cargo out of delivery terminals quicker.

The “Momentary Empty Container Depot” can be operated on 30 acres of a vacant, undeveloped space on Pier S on Terminal Island.

The non permanent depot will assist put again into circulation extra of the chassis — the wheeled trailer-frames that vans use to haul cargo containers. As a result of many terminals are congested as a result of present peak in cargo quantity and don’t have any room to simply accept empty cargo containers, extra space is required to briefly retailer these empties. The non permanent empty container storage depot will present a location for truckers to ship empty containers and take away them from a chassis, after which use the chassis to select up and haul loaded containers to their vacation spot.

“The depot could possibly be prepared to begin accepting empty containers in two weeks [one week now], which might carry some wanted aid to our tenants and the complete provide chain,” mentioned Jon Slangerup, Port of Lengthy Seashore Chief Govt.

No Federal Mediator

Regardless of pleas from shippers, President Obama refuses to make use of his affect to encourage the PMA and ILWU to make use of a federal mediator within the decision of the turned ugly contract negotiations which have been making a nasty scenario on the ports worse.

The next quote from a Journal of Commerce article sums up the White Home’s place on the scenario properly:

“Simply final 12 months, there was a protracted negotiation on the East and Gulf Coast ports,” White Home spokesman Frank Benenati instructed Bloomberg in an e-mail. “And simply as the 2 sides in that case have been in a position to resolve their variations by way of the time-tested means of collective bargaining, we’re assured that administration and labor on the West Coast ports can do the identical.”

Fascinating that the White Home would level to the negotiations between the ILA and USMX on the East Coast as a result of federal mediation was introduced in on that scenario to ensure that the negotiations to succeed in decision.

Truckers Strike

The phrase “strike” just isn’t one shippers wish to hear proper now in reference to the ports. However within the background of all this congestion and the ugliness between the PMA and ILWU, there are truckers who wish to unionize and are picketing to make their voices heard.

Teamsters affiliated Justice for Port Truckers is picketing port drayage corporations Inexperienced Fleet Techniques, Pac-9 Transportation, TTSI, QTS Inc., LACA Specific, and WinWin Logistics over wage theft and misclassification.

Demonstrations and picket strains from these truckers additionally present up on the Ports of Los Angeles and Lengthy Seashore. At the moment, operations on the ports don’t appear to be affected, but when the ILWU decides to honor these truckers’ picket strains on the ports as ILWU members did again in July, there’s nothing in place to pressure the union members again to work.

Stress & Accusations Between PMA & ILWU

No shock that the ILWU contract negotiations is the ugly as this has been sprinkled by way of the entire weblog. Negotiations that gave the impression to be going properly turned ugly between the PMA and ILWU in the beginning of November.

The latest headline from the PMA on the scenario is Longshore Union Slowdowns Proceed in Advance of Essential Vacation Purchasing Season.

In that launch on November thirteenth, the PMA says the ILWU “continues slowdowns in Seattle and Tacoma, walks off job in Oakland and refuses to dispatch tons of of expert staff in Los Angeles and Lengthy Seashore”

The ILWU continues to disclaim orchestrating slowdowns, saying the PMA is deceitfully blaming them for the port congestion issues which can be hurting so many shippers.

What do you consider this entire scenario, Clint?

Yeah, I feel that disdainful look on Mr. Eastwood’s face says all of it.

At Common Cargo Administration, we monitor the scenario on the ports intently and use this weblog to maintain you knowledgeable on the newest happenings in worldwide delivery information.