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.”