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Holiday Imports Decline as Port Issues Linger

Holiday Imports Decline as Port Issues Linger

Los Angeles – Import cargo volume at the nation’s major retail container ports is expected to continue to slow down this month as cargo congestion and other issues continue to impact port operations on the U.S. West Coast.

The volume slide is a result of “far-sighted retailers instituting costly contingency plans early on to ensure that holiday merchandise would be on the shelves or sitting in a warehouse ready to go,” according to National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold.

“However, we are still hearing from retailers experiencing delays at West Coast ports, and retailers are also looking ahead to the spring season,” he said, commenting on the most recent Global Port Tracker report released today by the NRF.

“We believe it’s imperative for President Obama to encourage the parties to seek the help of a federal mediator to resolve the ongoing contract negotiations so serious solutions to address the ongoing issues can be discussed and the uncertainty that has plagued our nation’s busiest ports for months can finally be brought to an end.”

A major transpacific shipping alliance – the G6 – has reacted to the congestion problem by suspending eastbound calls at the Port of Los Angeles for the next four sailings of its Asia-U.S. West Coast service, due to “ongoing congestion.”

The G6 is comprised of APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL.
It’s also been reported that G6 will skip other calls at APL’s Global Gateway South terminal in Los Angeles in order to “remain fluid,” according to an APL customer advisory.

Carriers calling Los Angeles and other U.S. West Coast ports have been significantly impacted by chronic backlogs that have plagued the Los Angeles/Long Beach port complex over the past few months.

The congestion in Southern California is due to a combination of chronic issues plaguing both Los Angeles and the neighboring Port of Long Beach that include a shortage of the chassis need to move containers in and out of the ports; unrest amongst truckers required to meet what they feel are increasingly burdensome environmental regulations; and labor negotiations between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU) that have dragged on for months with, some feel, no end in sight.

The contract between the PMA and the ILWU expired on July 1, prompting ongoing concerns about the potential shift of cargo to ports on the U.S. East Coast.

The NRF report was researched by business consultancy Hackett Associates.

According to Hackett Associates President Ben Hackett, “The question is whether cargo currently being diverted to the East Coast will shift back to the West Coast once congestion in Los Angeles/Long Beach ends or are we experiencing a longer-term shift?” Hackett said. “Time will tell.”

12/09/2014

Long Beach Tackles Chronic Port Congestion

Long Beach, CA – Responding to the chronic congestion snarling the movement of cargo containers through one of the country’s busiest ports, the Long Beach Board of Harbor Commissioners has approved the use of port property as a temporary site for the storage of empty containers.

The “Temporary Empty Container Depot” will be operated on 30 acres of a vacant, undeveloped area on Pier S on Terminal Island in a move to “help to free up needed equipment to move cargo out of shipping terminals faster” and “put back into circulation more chassis,” the wheeled trailer-frames that trucks use to haul containers.

Truckers using the new will be able to deliver empty containers and remove them from a chassis, and then use the chassis to pick up and haul loaded containers to nearby intermodal rail facilities or their regional destinations.

The depot will be operated by a private company, Pasha Stevedoring and Terminals, under a permit that will expire at the end of March 2015.

Designation of the new depot is reportedly one of several measures the port is pursuing to relieve the congestion issues that have come with a surge of cargo in the last two months caused by the busy peak shipping season, the advent of larger ships and a change in the ownership system for chassis fleets.

In addition to the depot, the port has reportedly crafting a plan to operate its own chassis fleet for peak cargo shipping seasons and facilitate the introduction by private chassis fleets of an additional 3,000 chassis into the local equipment pool.

“We hear our customers loud and clear,” said Doug Drummond, president of the Long Beach Board of Harbor Commissioners. “This congestion is not acceptable, and the Long Beach Board of Harbor Commissioners is ensuring that the Port of Long Beach is doing everything it can to see that we clear up these issues now and forever.”

11/17/2014

 

White House Engagement Urged in Port Dispute

Los Angeles, CA – Led by the National Retail Federation, a diverse coalition including retailers, manufacturers and farmers and other supply chain stakeholders has addressed a letter to the White House urging the government’s immediate involvement in the on-going contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

Port terminal management represented by the PMA and the leadership of the ILWU have held talks since May, but have yet to approve a final agreement on a contract that expired in July, which covers dockworkers at 29 U.S. West Coast ports from Seattle to San Diego.

While the two parties have said they would remain at the negotiating table until a new deal is struck, recent labor activities – most recently at the Port of Seattle and Port of Tacoma – “have led to a noticeable uptick in rhetoric and tensions that is causing the nation’s importers and exporters anxiety and alarm,” the letter said.

“The sudden change in tone is alarming and suggests that a full shutdown of every West Coast port may be imminent,” it read. “The impact this would have on jobs, down-stream consumers, and the business operations of exporters, importers, retailers, transportation providers, manufacturers, and other stakeholders would be catastrophic.”

The coalition detailed what it asserts would be the impact of a port shutdown, including damaging the viability of the West Coast ports and the economic consequences of disrupting the supply chain.

The group called on the Obama Administration “to become engaged in the contract negotiations before a disruption can occur,” and recommended the use of a federal mediator to forestall any threat of a management-directed lockout or labor-initiated strike.

“We believe immediate action is necessary and the federal government’s use of all of its available options would be helpful in heading off a shutdown and keeping the parties at the negotiating table,” the letter said.

The NRF and the National Association of Manufacturers (NAM) issued an economic analysis in June that found a port shutdown would cost the U.S. economy approximately $2 billion a day.

The NRF-NAM analysis estimated that a 5-day stoppage at ports on the U.S. West Coast would reduce U.S. GDP by $1.9 billion a day. This would increase exponentially with a 20-day stoppage resulting in a loss of $2.5 billion a day.

The last prolonged port shutdown of the ports was the 10-day lockout in 2002 which took months to recover from and cost the U.S. economy close to an estimated $1 billion a day.

11/07/2014