Oct 17

No consensus on how to fix LA-Long Beach ports

From www.joc.com

Representatives of the port, shipper and labor communities agree that Los Angeles and Long Beach must reduce congestion and improve productivity at marine terminals, but they differ on how to reach those goals.

“We are three to five days behind our normal flow of goods. This is having a ripple effect throughout the supply chain,” Jon Slangerup, executive director of the Port of Long Beach, told a seminar Wednesday evening sponsored by the Center for International Trade and Transportation at California State University in Long Beach.

Marine terminal congestion has been a nagging problem all year at the largest U.S. port complex, but cargo interests say the problem is approaching a crisis stage during the current peak shipping season.

Slangerup said the chronic congestion and peak-season crisis has been a “wake-up call” that should motivate all participants in the supply chain to do what they can to reduce congestion and improve productivity.

“The reality is, the system has a lot of bottlenecks,” he said. The system is not broken but is stretched and stressed, and each stakeholder can help to fix the system by addressing those functions over which it has control, Slangerup said.

For example, the ports have struggled following the decision by most ocean carriers to quit providing chassis to their customers. The carriers sold those assets to the big three leasing companies, TRAC Intermodal, Flexi-Van and DCLI. The result has been a severe dislocation of chassis — equipment not where it is needed — that is adding to other productivity issues and elevating port congestion.

Long Beach port officials say chassis shortages and dislocations are the root cause of the ports’ congestion problem. The harbor commission is addressing this weak link in the supply chain with a 30-day study that could result in the port authority buying thousands of chassis and establishing an entity to manage and deploy the equipment for use during peak shipping periods.

“The Port of Long Beach is taking an active position by becoming an operating port for chassis,” Slangerup said.

Port congestion is making huge demands on supply of  labor as terminal operators must hire more longshoremen each day to handle a cargo volume that is only slightly higher than it was a year ago. According to numbers posted on the website of the Pacific Maritime Association, man-hours in Los Angeles-Long Beach for the four-week period ending Oct. 3 were up 25 percent from the corresponding period last year.

Bobby Olvera, president of International Longshore and Warehouse Union Local 13, said this indicates it’s time to expand the dockworker force and train more part-time workers, known as casuals. The last time the longshore rolls in Southern California were expanded was seven years ago, he said.

Slangerup said systems and processes must be improved so the transportation community can work smarter. He said PierPass Inc., the organization established by terminal operators in Southern California to administer a program of extended-hours at gates, is a data-rich organization that provides a foundation for improvement of terminal processes. “I see a PierPass 2.0 providing an integration of systems,” he said.

Peter Friedmann, who heads Washington-based trade organizations representing agricultural shippers, forwarders and customs brokers and various cargo interests, expressed serious reservations about PierPass. He said the organization, which charges a traffic mitigation fee to support the operation of up to five extended gates each week, lacks transparency, and therefore is considered suspect by the shipper community.

“PierPass is driving cargo away. It is an unfair and dishonest system,” he said. The shipper community tries to get accurate numbers on how much money PierPass is collecting in fees and how much the terminals are spending on extended gates, but cannot get that information, he charged.

Cargo interests and truckers contend the ILWU is contributing to port congestion through various tactics that may or may not be related to the coastwide contract negotiations that have been under way since May. For example, cargo interests cite working-slow tactics at the TraPac terminal in Los Angeles to influence manning requirements being developed as the terminal automates its processes.

The type of automation TraPac is implementing in Los Angeles has been used by some European terminals for more than 20 years. However, Olvera contends that it is inefficient in comparison with manual cargo-handling practices, and that it creates a safety hazard with “machines bumping into each other.”

Truckers in Southern California are livid over extra safety checks the ILWU started requiring two weeks ago at some of the 13 container terminals in the harbor. Truckers say the additional safety checks, which the ILWU did not deploy in the past and go beyond normal safety checks for roadability of equipment, require that drivers get out of their trucks, which further delays the exit process from the terminal.

Olvera said the safety checks are necessary because an equipment problem was recently discovered at one facility that could have led to a serious accident if not corrected. “Safety is always an important issue,” he said.

However, Olvera did say that truckers, who are paid by the trip, are spending far too much time sitting in long lines at marine terminals. “We have to operate our facilities more efficiently. Why would truckers want to come here when they sit in line for two hours?” he said.

Truckers, through the California Trucking Association, say ILWU safety checks on chassis have also increased during the coastwide contract negotiations and the longshoremen appear to be “red-tagging” more chassis than in the past for service defects. ILWU jurisdiction over maintenance and repair of chassis is reportedly one of the issues being discussed in contract negotiations.

As the various factions in Southern California spar over the causes and possible solutions of port congestion, problems mount for importers and exporters, especially exporters of agricultural products, Friedmann said.

The Agriculture Transportation Coalition continues to remind port and shipping executives that farm and forest product exports contribute significantly to the nation’s economy, but that global competition for these markets is fierce, margins are low, and any transportation glitch that disadvantages U.S. shippers will show up immediately in lost export opportunities.

“There is nothing we produce that can’t be produced elsewhere,” Friedmann said. “Nothing.”

Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him on Twitter: @billmongelluzzo.

 

Oct 17

Congestion at US Ports, No End In Sight

From www.joc.com

Congestion at large U.S. ports is generating increased complaints by truckers and shippers about demurrage penalties for late pickup of containers that can’t be removed from gridlocked marine terminals.

The problem is most acute at the two largest U.S. container gateways, Los Angeles-Long Beach and New York-New Jersey, both of which are struggling to deal with bigger ships, rising volumes and chassis supply.

Demurrage complaints were prominent at a Oct. 1 Federal Maritime Commission hearing on port congestion. In a speech the following week to the annual New York-New Jersey Port Industry Day, Commissioner William Doyle said the issue “is surfacing more and more.”

“I have heard numerous examples of shippers who are ready, willing and able to pick up their containers but through no fault of their own are precluded from getting their boxes. As a

result, they have to pay a fine for the storage days on the terminal,” he said.

Cargo interests and the trucking companies they contract with are liable for demurrage if they don’t retrieve boxes within a certain number of “free days” after containers are unloaded from a ship. Terminals impose the charges to discourage use of their facilities for extended storage.

Demurrage is assessed against the cargo, but shippers often blame truckers for failing to pick up containers on time. When that happens, truckers may be stuck with the bills, which can mount quickly.

Recurrent congestion at New York-New Jersey terminals during the last two years has produced tens of millions of dollars in demurrage charges for exceeding free time on imports, and in per-diem penalties for late return of containers. Truckers, shippers and terminals at the port are still fighting over some bills from last winter.

New York-New Jersey terminals have granted one-day extensions of free time and waivers of demurrage when terminals are closed or severely congested. Maher Terminals, for example, granted a one-day extension in free time after it encountered gate system problems Thursday. Terminals also grant case-by-case exemptions. But truckers and cargo interests say they’re still being stuck with bills for problems beyond their control.

Current complaints about demurrage appear to be loudest in Los Angeles-Long Beach. Harbor truckers and cargo interests say terminals are refusing to waive the fees, even when congestion at terminals makes it impossible to pick up containers. Some beneficial cargo owners report hundreds of containers stuck in the ports, accumulating demurrage penalties.

Congestion at Southern California terminals cropped up at the start of the year and has worsened during the summer-fall import peak season. Truckers say they receive regular bulletins advising that a section of the terminal has been shut in order to clear backlogs. If a container’s free time expires that day, the trucker is billed anyway.

Noel Hacegaba, managing director of commercial operations at the Port of Long Beach, said port staff is aware of this situation and has had discussions with the harbor commission about possible remedies. “We are exploring all options,” he said.

Free time and demurrage are specified in tariffs that terminals file with the FMC. In Los Angeles, demurrage on a 40-foot container is $43.60 for the first five days after free time expiration, and $87.32 per day afterward. At Long Beach, the charges are $44 and $87. The charges are assessed by terminals, not the landlord port authorities.

New York-New Jersey demurrage fees are steeper. Members of the New York Terminal Conference, which represents all terminals except Maher, assess daily charges of  $145 for the first four days, $195 for the fifth through ninth days, and $355 for the 10th day or beyond. Daily demurrage charges for refrigerated cargo are $360 for days 1-3, and $521 afterward. Maher’s separate FMC-filed tariff has slightly higher charges.

Los Angeles-Long Beach truckers claim some some terminals are using demurrage as a profit center, charging $100 or more per day. Gene Seroka, executive director of the Port of Los Angeles, said that although his port is also looking into the demurrage issue, he hadn’t heard those allegations. “I will investigate it,” he said.

Motor carriers also are being charged per-diem fees for the late return of containers to terminals after they are emptied of import cargo. Truckers say terminals are offering no relief on per-diem fees even if drivers are shut out of terminals because of congestion.

Yet another beef by truckers involves “line demurrage” they say some ocean carriers charge in addition to the regular demurrage penalties levied under terminals’ tariffs.

“I’ve always questioned the legality of that in FMC tariffs — why a steamship line, which is not the terminal operator, has the right to charge line demurrage” to the beneficial cargo owner or trucker, said Jeff Bader, president of the Association of Bi-State Motor Carriers in New York-New Jersey.

Rising demurrage and per-diem charges are directly related to congestion at terminals, truckers and cargo interests say.

Reduced free time and increased demurrage charges “penalize shippers for the terminals’ own lack of efficiency,” Don Pisano, president of American Coffee Corp. in Jersey City, New Jersey, said at the FMC’s Baltimore hearing. “What is extraordinary is the sense that the carriers and the terminal operators only seem to serve each other — all others be damned.”

Chassis shortages and dislocations are leading some Los Angeles-Long Beach terminals to insist that truckers bring their own chassis, and to have an empty or loaded container on it. That’s long been the de facto situation at New York-New Jersey terminals where chassis are chronically in short supply and terminals are jammed with empty boxes.

In recent months, terminals in New York-New Jersey and Virginia have temporarily halted the return of empty boxes because of congestion. That’s contributing to a new problem: Some New York-New Jersey truckers complain that ocean carriers are requiring truckers to go out of their way to return empty containers to off-dock sites without adequate compensation.

Los Angeles is considering designation of vacant lots for off-dock storage of containers as a way to relieve pressure at the marine terminals, some of which report land utilization rates above 90 percent, Seroka said.The port also is investigating the use of off-dock locations as additional maintenance and repair sites so longshoremen can service equipment when on-dock facilities are congested.

While the congestion continues, truckers are struggling to maintain service and retain drives under federal drivers’ hours-of-service restrictions. Alex Cherin, executive director of the Harbor Trucking Association of Southern California, said the organization has discussed petitioning the Federal Motor Carrier Safety Administration for a temporary waiver of the HOS rules.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him on Twitter: @BillMongelluzzo.

Contact Joseph Bonney at jbonney@joc.com and follow him on Twitter: @JosephBonney.

 

Oct 07

Congestion worsens at LA-LB port complex with no relief in sight

From JOC.com

Congestion at the ports of Los Angeles and Long Beach grew worse over the weekend, with no relief in sight as late peak-season container volumes descend on the largest U.S. port complex.

“The vessels keep arriving and the trucks keep arriving,” said John Cushing, president of PierPass Inc., which manages the extended gates program for the 13 container terminals in the port complex.

Cushing said terminal operators are spending millions of dollars and taking extraordinary steps, including running very costly “hoot owl” shifts from 3 a.m. to 8 a.m. to relieve congestion in their container yards. But the cargo keeps building up at the terminals. According to the individual ports, combined container throughput in 2014 through August at the Ports of Los Angeles and Long Beach are 4.5 percent higher than the same period in 2013.

Each terminal operator has a slightly different story to tell. Some terminals say the congestion ebbs and flows depending upon chassis availability. A terminal will get enough chassis for several consecutive days to clean out its yard, but then the equipment supply dries up and the terminal is congested again.

“There are times when the imports are not moving. The numbers are outrageous —6,000 to 7,000 containers just sitting at the terminals,” he said.

Another terminal operator said he is working only two cranes each week against a vessel with a capacity of 10,000 20-foot containers, rather than five cranes as he should be, because the yard can not absorb any more boxes. Vessel operations are slowing down to the point where some terminals are in danger of having to tell vessel operators to slow down their arrivals because the ships can not be handled on schedule.

Large North American gateways such as Los Angeles-Long Beach, New York-New Jersey and Vancouver, Canada, have been struggling with congestion problems on and off throughout the year. The ripple effect of brutal winter weather in the eastern half of the continent, congestion and rail car shortages on the rail networks, truck and driver shortages and chassis dislocations are well documented.

In Southern California, truckers and terminal operators point to chassis being in short supply, in the wrong place at the wrong time or chassis being out-of-service as being the main culprit.

“Chassis are the Achilles’ Heel here,” said Fred Johring, president of Golden State Express and chairman of the Harbor Trucking Association of Southern California.

Ocean carriers earlier this year exited the chassis business in Los Angeles-Long Beach and New York-New Jersey, selling the assets to chassis leasing companies. Terminals on both coasts immediately began to report that they did not have enough chassis, not because the overall supplies in the harbors were reduced, but because the business relationships involving cargo interests, shipping lines, terminal operators and chassis providers had changed.

Suddenly, truckers were told by a terminal that the chassis they needed were no longer being stored at the terminal, so the truckers had to make an extra trip to a location where the chassis suppliers stored the equipment. In instances where a terminal had chassis, many more chassis than usual were being “red-tagged” as being out of service and in need of repair.

Terminal operators say the chassis providers are refusing to pay the suddenly high repair costs that terminals with International Longshore and Warehouse Union labor are charging, or the chassis providers would only authorize repairs during the 8 a.m. to 5 p.m. day shift to avoid overtime pay. Chassis providers say they are authorizing repairs as quickly as they can, and have indicated to the ports that there are not enough skilled mechanics at the terminals to do the work.

As containers back up at the terminals, ILWU labor is working overtime just to do the normal work of unloading vessels, cleaning out the yards and processing trucks into and out of the facilities. According to figures posted on the website of the Pacific Maritime Association, the container volumes handled in Los Angeles-Long Beach in August were up 1 percent from August 2013, but the man-hours paid by the terminals were 20 percent higher.

Citing those numbers, PMA President Jim McKenna said, “when we’re using 20 percent more labor to do 1 percent more volume, we’re doing a lot of work.”

McKenna put the problems at the ports squarely on the shoulders of the chassis issue. “The root of all evils in the harbor is the chassis shortage,” he said.

The extra moves that longshoremen must make each day to clean up the container backlog are sucking up skilled labor, and terminals are reporting that the PMA has begun to rationalize the dispatching of positions like top handlers and rubber-tired gantry operators. Those positions can not be handled to part-time workers, known as casuals.

The extra work is also forcing terminals to use a higher percentage of casuals for driving yard tractors and other positions they can fill, but productivity normally drops when the percentage of casuals increases.

Terminal operators say a shortage of truck drivers both in the harbor area, and at the warehouses in the Inland Empire 50 miles from the ports, is causing the dwell times for containers and chassis to skyrocket.  Alex Cherin, executive director of the Harbor Trucking Association, said the HTA saw the driver shortage surface several years ago as a result of the clean-trucks program in Southern California. The truck and driver population of mostly owner-operators went from 15,000 to less than 10,000 as non-compliant trucks were phased out.

HTA took actions such as helping to develop a driver training program at a local community college, but the overall problem was masked by the economic recession. Now that the recession is over, the driver shortage is all too apparent, he said.

“You hear more about it on the drayage side, but it exists throughout the industry. It’s a national problem,” Cherin said.

As a result, hundreds of chassis with empty containers are sitting idle at the 1.5 billion square feet of warehouse and distribution facilities throughout Southern California, effectively taking the chassis out of use. Trucking companies say the beneficial cargo owners are so desperate to get their inbound loads that they are telling drivers not to bring the empties back to the harbor and be forced to wait two hours or longer to be processed, but rather to go “bobtail” right to the harbor as soon as the inbound containers are cleared for pickup.

Terminal operators confirm that the number of dual transactions (empty container into the terminal and loaded import container out of the terminal) have plummeted. Cushing said that PierPass is meeting with chassis providers, truckers, shipping lines and terminal operators in an attempt to work out at least a short-term solution to problem. After having met with executives of the three largest equipment providers — Direct ChassisLink Inc., Flexi-Van and Trac Intermodal — PierPass was told a long-term solution to the chassis problems will not materialize until early 2015, Cushing said.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him on Twitter: @billmongelluzzo

Sep 29

Root Causes of Chronic West Coast Congestion

Below is a memo received regarding the west coast delay issues:

“This past week I was involved in a simple move from the Port of Long Beach to So. El Monte, CA.  The shipment was one container via CMA CGM.  We have executed this move over 2700 times for this customer over the course of the last 7 years.  For approximately 4 out of the 7 years we have used the same drayage company to handle the delivery and without fail it has run flawlessly.  Last week, without prior notice that drayage company sent a letter to our customer, the importer of record, informing them they will no longer handle the container drayage for them, effective immediately.  We had to scramble to cover 5 loads that week for our customer, we were successful in getting 4 containers delivered.  Friday, September 26th the 5th container was still not delivered, and our customer’s customer was threatening to cancel the order.

After going through our roster of drayage companies we could not get one company to go in, on that Friday morning, wait in line, hook up and deliver the container.  Finally at 10:30AM, we found a trucker who would deliver the goods, for a premium:  $1000+ drayage+demurrage, live unload.  Basically, it would cost the customer $2450 to deliver the container to South El Monte, which is only 29.6 miles from the Port of Long Beach.

I was in copy all week and morning regarding this move, and when I read the $2450 cost to deliver the container, I couldn’t believe it!  Without going into details, I was able to pull a favor from a drayage company to go in and pick up the container at zero additional cost.  In following up on delivery of the container, I reliazed the following:

  1. The driver was dispatched at 11:35AM
  2. The container would be on wheels waiting for the driver in a pulled staging area
  3. With a guarantee from CMACGM and the Port, the driver would be let right into the terminal to pick up the container
  4. With all the measures taken to assure a quick hook up and departure, it still took the driver 5 hours to get out of the port
  5. Delivery was finally effected by 6:45PM Friday night

I have taken the time to give a little bit of detail on this expedited pick up at the port to give everyone an idea of what is happening at the Port of Long Beach and Los Angeles.  If this is the time frame for an expedited pick up, with wheels, what is the turn time for a normal container pick up, which by the way, would not include wheels?  The answer is simple:  from the time a driver gets in line outside of the terminal, to the time it takes for him to pull up to the gate, to finally the time it takes to hook up and leave the terminal, it is averaging 5.5 to 7 hours.  That means a driver that goes into the port, will most likely only get one turn for the day, maybe 1.5.  A truck needs to make $600/day to cover it’s operating cost, a move to Ontario California costs $395 total.  Where is the profit for the drayman?  Hence the one and only reason drayage companies are no longer willing to pull containers out of the port.  Here are the main reasons the port is so congested and a mess:

5 Issues that lend to the port congestion:

  1. The Carrier business model regarding chassis management:  The carriers have divested themselves from the ownership of chassis.  Today there are 3 companies that manage the chassis pools: two Equity Firms, and one Private Party.  With the 3 parties managing the chassis pool, there is a lack of continuity in obtaining chassis.  The result is a very clumsy and cumbersome process.
  2. Bigger Ships with less arrival dates:  The larger vessels are taking more time to unload, with a significant increase in labor.  Last year, the labor scheduled 1000 workers/ day, this year the ports are calling 1300 workers/ day.  In reference to space, with the larger vessels needing more space to stage containers, not one terminal has increased their space.  Back to the chassis issue; all carriers are utilizing the lease chassis program, (except Evergreen), which has changed the port from a wheeled operation to a full grounded operation.
  3. Bigger Alliances, (Vessel Sharing Agreements): This has caused, in many cases an additional 1.5 to 2 hours of additional time to return empty containers and chassis in different areas.  (Consider a CMA CGM vessel coming in, and CSCL is the partner:  The CSCL container will mount on a CMA CGM terminal chassis.  When the container is unloaded, the return will be as follows:  The CMA CGM container will be returned to their terminal, while the CSCL chassis must be returned to their terminal)
  4. Pier Pass is not working:  There is no consistency within the terminals as there was suppose to be Monday through Thursday, (nights) operating for pick up and Saturday.  All terminals are setting their own Pier Pass schedule.
  5. There isn’t a grey chassis program, and until this is approved obtaining chassis and returning chassis will continue to the major hindrance in getting the terminals to smoothly push containers out.

With the 5 points, drivers have gone, since last year this time, 3-4 loads a day to 1-1.5 loads per day.  Simply this is not covering costs.  And until something changes to address the 5 points we will see the problem get worse before it gets better.”

Sep 12

Delays in Southern LA Ports Caused by Chassis Shortage

Reports have been continuing on delays transferring containers from ports to rail heads in the Southern California ports.

Containers on chassis are sitting unloaded at warehouses that are at capacity limits. Many retailers shipped seasonal inventory early to avoid possible disruption from the anticipated ILWU strike.

Sep 03

Port congestion hits Asia, disrupting schedules

JOC › Maritime News › Container Lines

 | Sep 03, 2014 6:35AM EDT


  •  Congestion at ports across Asia is creating havoc with shipping schedules, forcing a major intra-Asia specialist to cancel rotations as it battles lengthy delays.

Robert Sallons, managing director of Cheng Lie Navigation Co. (CNC Line), told JOC.com the congestion was affecting the ports of Incheon in Korea, Qingdao and Shanghai in China, Hong Kong and Cat Lai in Vietnam.

“We operate with a 21-day port rotation but lose up to 12 days in Manila alone, so by the time we get to Cat Lai we are already bumping into the next rotation. Wait times in Hong Kong are 18 to 36 hours. It means we are forced to lose one rotation every 21 days,” he said.

CNC Line was acquired by French line CMA CGM in 2007 and operates exclusively in Asia. With a throughput of 850,000 TEUs in 2013, the line is expecting to carry 1 million 20-foot containers this year. However, the improving business environment is causing problems.

“The container volumes are strong in intra-Asia, the fuel price is down and freight rates are stable. But we are having to spend more money on schedule recovery than before. On long haul Asia-Europe services carriers can recover schedules between ports, but that cannot be done in Asia where the transit times are so much shorter. So we have to increase speed or slide services,” he said.

Another option carriers use when faced with regular port delays is to add an additional vessel to a string, but Sallons said this was not possible with the current delays.

“Normally we would add a fifth ship to a four-ship string to buffer any delays, but shorter voyages mean it would not work even with an extra vessel. And because volumes are so strong, port omissions are no longer viable.”

Part of the problem at the big gateway ports is that larger ships bring in more containers and need to stay longer. Sallons said other issues being faced by the ports included dense fog in Korea and northern China, monsoon rain and regular typhoons in the Philippines, and poor terminal design. The ports of Keelung, Incheon, Cat Lai, and Hong Kong’s Kwai Chung have limited space and can not cope efficiently with increasing volumes.

“Cat Lai is smack in the middle of Ho Chi Minh City, and at the port of Manila containers have to be trucked in and out through the city, causing congestion.”

Manila’s port congestion worsened after the municipal government imposed a daytime truck ban in February in an attempt to clear the Philippine capital’s notorious gridlock. All it did was bring the port to a standstill while doing little to free up the streets.

Michel Azrak, general manager of CMA CGM Philippines, said the average dwell time for import cargo at the port of Manila was now 12 days.

“All the depots are full and apart from the empties, there are many laden containers that consignees have not picked up,” he said.

The Philippines Ports Authority this week ordered shippers with customs-cleared containers in the port to collect their boxes or they would be shipped out to the ports of Batangas and Subic.

“All the shipping lines are facing the same situation,” Azrak said. “We don’t expect an improvement for at least another four months because customers will all start receiving their Christmas orders and early next year the Chinese New Year rush will begin.”

Persistent congestion has also clogged major gateway ports in the U.S. and Europe, where it is raising a debate about whether it’s just peak-season volumes causing delays in import shipments or the inability of ports to handle the sharp growth in container ship sizes. Nearly half of all post-Panamax ships saw delays of 12 hours or more at North and South American ports in July, according to a recent study released by CargoSmart.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.

 

Aug 27

Good Sign for ILWU PMA West Coast Talks?

From JOC.com 2014-26-8

The International Longshore and Warehouse Union and the Pacific Maritime Association released a joint statement on Tuesday saying they have come together on at least one topic, and a highly contentious one at that: health benefits.

The joint release, which has become the style of these unexpectedly tame negotiations, came just after 5 p.m. West Coast time today. Although both the PMA and ILWU did not disclose terms of the agreement, the release — like several earlier statements from the negotiations — was meant to show progress innegotiations that so far have been quiet and largely void of public information.

The release reads: The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) announced today that they have reached a tentative agreement on terms for health benefits, subject to agreement on the other issues in the negotiations. The parties have agreed not to discuss the terms of this tentative agreement as negotiations continue.”

It continues: “Maintenance of health benefits (MOB) is an important part of the contract being negotiated between employers represented by the PMA and workers represented by the ILWU. The contract being negotiated covers nearly 20,000 longshore workers at 29 West Coast ports. The previous agreement expired at 5 p.m. on July 1, 2014. Talks began on May 12 and are continuing.”

The five-sentence press release gave no further details on how negotiations are progressing. In particular, it was silent on whether the contract that emerges will be three or six years in duration. The possibility that the two sides would fail to agree on the health care issue raised the prospect that the agreement would be three years, versus the six-year duration of the prior two contracts, under the theory that a possible Republican-controlled Congress might repeal aspects of Obamacare that were subject to dispute between the two parties, and thus resolve the issue. However the wording in the release points to the possibility that the three-year scenario won’t be what plays out.

It was known from the beginning that health benefits would to be one of the main issues in this year’s contract negotiation. At the JOC’s TPM conference in March, PMA President James McKenna indicated that negotiators might decide to postpone the issue of who — dockworkers or employers — must pay for an estimated $150 million per year Obamacare tax on the union’s premium health care plan. Such a direction would have resulted in a three-year agreement, which would have led to a new chapter of uncertainty shortly after the conclusion of the current negotiations. By saying there is an agreement, it seems unlikely the resolution is simply to postpone the decision pending a possible change in the law, which some see as unlikely.

Under the expired contract, employers pay 100 percent of premiums in the ILWU health and dental care plan for members and their families, and union members pay just a $1 co-pay per prescription for medicine. Since the tax takes effect in 2018, some have suggested that the union and employers can revive the issue then, in a subsequent contract negotiation.

The two parties have been meeting regularly since May 12, when negotiations officially began, but were unable, as expected, to reach an agreement before the contract expired on July 1. Both sides have jointly pledged on several occasions to keep cargo moving without disruption. Before talks began, it was noted that jurisdiction and terminal automation would also be haggled over during negotiations.

Complete coverage of the ILWU/PMA negotiations

This is the second large announcement from the ILWU today. Earlier, the union ratified a contract with Pacific Northwest grain handlers, ending a two-year labor battle that resulted in picketing and lockouts at two terminals. ILWU heads were negotiating with the grain handlers and the PMA simultaneously, and the ratification allows the ILWU to be at the table exclusively with the PMA to hammer out a new deal.

Contact Corianne Egan at cegan@joc.com and follow her on Twitter: @CEgan_JOC.

Link from JOC: http://www.joc.com/port-news/longshoreman-labor/international-longshore-and-warehouse-union/ilwu-pma-reach-tentative-agreement-health-benefits_20140826.html 

Aug 21

Ningbo Port Trucker Strike Paralyzes Ningbo Port

From JOC.com        A trucker strike has brought the Ningbo port, the world’s sixth-largest container port, to a standstill in the midst of the peak shipping season. As in many other ports worldwide, port truckers, or draymen, are a volatile element of the container supply chain. Typically independent owner-operators, they can see their earnings take a hit any time congestion creates wait lines to enter terminals, which reduces the number of jobs they can do in a single day, or when fuel prices go up.

Jul 21

ILWU, PMA Schedule Two Breaks in Talks

Source:  www.joc.com

Contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association will resume on Wednesday after a recess Monday and Tuesday for a previously scheduled longshore division caucus.

A joint ILWU-PMA statement at the weekend said the previous contract, which expired July 1, would not be extended while negotiations are recessed. However, the union and employers said, “While there is no contract extension in place, both parties have pledged to keep cargo moving.”

Though it isn’t unusual for the ILWU to call caucuses from time to time, next week’s meetings “will certainly cover the contract negotiations,” ILWU spokesman Craig Merrilees said.

Caucus members are democratically chosen delegates elected from each local union. Those delegates determine the agenda and the topics to be discussed.

“Caucus meetings are held as needed. This one was scheduled some time ago,” Merrilees said.

Earlier this month, the union agreed to extend its previous contract when talks recessed for three days so the ILWU could participate in contract negotiations with grain handlers in the Pacific Northwest. The grain contract is not related to the ILWU-PMA contract, and the grain handlers are not members of the PMA.

During that recess, the Teamsters union set up pickets at several container terminals in Los Angeles-Long Beach in support of striking drivers who were targeting three harbor trucking companies. ILWU members at those terminals walked off their jobs.

Because the previous ILWU contract was back in place, employers used the grievance procedure to call in an area arbitrator who ruled that the pickets were not “bona fide” under the waterfront contract, and the longshoremen were ordered back to work.

Since then, Los Angeles Mayor Eric Garcetti brokered a deal between the drivers and trucking companies and the pickets have been removed from the harbor.

The joint PMA-ILWU statement at the weekend also noted that the coastwide negotiations would recess on July 28 to Aug. 1 so ILWU negotiators can return to the Pacific Northwest to resume negotiations with grain handlers.

The ILWU and the PMA are not releasing information about the coastwide contract negotiations. Although cargo interests are concerned the negotiations have continued almost three weeks past the July 1 deadline without an agreement, cargo volumes at West Coast ports remain strong.

Weekly tabulations of ILWU man-hours paid show that in Los Angeles-Long Beach man-hours in May through early July were running 20 to 30 percent above the same weeks last year.

Jul 12

Port Drivers Strike Enters “Cooling Off” Period

Source: American Shipper July 12, 2014

Port drivers in the ports of Los Angeles and Long Beach on Saturday agreed to a “cooling off” period brokered by L.A. Mayor Eric Garcetti between the drivers and three trucking companies. But tensions remain at the Southern California ports as drivers warn they won’t accept backsliding to meeting their demands…

Trucking companies targeted by the protesters agreed to allow all drivers to return to work without retaliation or requiring them to sign away all future rights.    According to Justice for Port Truck Drivers, which is part of the Teamsters Port Division, the drivers voted unanimously to end what they wer…