West Coast Port Progress Update

From www.joc.com

Vessel, yard and gate operations at West Coast ports are not yet back to normal after almost seven months of crippling congestion, but the ports and port users are confident that “normal’ will happen by the end of May.

Nevertheless, a return to the conditions that were considered normal before contract negotiations between the International Longshore and Warehouse Union and Pacific Maritime Association began on May 12, 2014 will not be good enough if West Coast ports are going to efficiently handle today’s big ships.

“The terminals are not designed for big ships,” said Dan Smith, principal at the Tioga Group. The consulting firm recently studied the ship-to-shore crane shortfalls at West Coast terminals. Now that the busiest terminals are expected to handle more than one big ship at a time, Tioga concluded that the ports will need 100 additional cranes in order to  work at least five cranes against every big ship that will be calling on the West Coast in the coming years.

Furthermore, the physical layout and operational methods at the terminals simply won’t stand up to the stress of efficiently turning vessels with capacities of 8,000 to 14,000 20-foot container units, he said.

When the ILWU and PMA on Feb. 20 reached tentative agreement on a new five-year contract, port directors said the entire coast would be back to normal in three months. Seattle, Tacoma and Oakland appear to almost there. Los Angeles and Long Beach are still grappling with cargo surges and sporadic but minot backlogs of ships at anchor.

Recent reports from the Marine Exchange of Southern California showed no ships at anchor and awaiting berths on some days , but on other days there were one or two. That is certainly much better than the peak of 28 ships at anchor two months ago. Terminal operators say the Pacific Southwest services are not completely back to their normal rotations, but they should be by the end of the month.

Gate turn times for truckers have also improved up and down the coast. Dick Coyle, president of Devine Intermodal, said he has lowered the congestion surcharge of $150 that Devine had been charging at most of the terminals in Oakland to $100, and will take further reductions if conditions continue to improve. Devine is still charging a $250 surcharge at the SSA Marine terminal in Oakland because of continued gate times of several hours or longer, Coyle said.

Vessels calling in Tacoma are back on schedule, said port spokeswoman Tara Mattina, but the port is dealing with occasional container surges as terminals continue to operate with shortened receiving windows, primarily for exports. Intermodal rail operations are about 90 percent of normal, she said.

There is still not an optimal flow of cargo in Los Angeles-Long Beach, although the terminals are “heading in the right direction,” said Weston La Bar, executive director of the Harbor Trucking Association. The gray chassis “pool of pools” unveiled on March 1 by the ports and the chassis-leasing companies has resulted in improved equipment availability, and terminals that experience occasional shortages are working through the issues, La Bar said.

Since the ports are about three months away from the beginning of the peak-shipping season, the terminals should have enough time to clean up their operations before the late summer-fall rush of holiday cargo descends upon the ports. Furthermore, the ILWU membership is voting on the tentative contract, and hopes are high that on May 22 the ILWU and PMA will announce that the contract was ratified.

Even with those positive developments, though, the shipping community is dreading the peak season. In a normal year, peak season container volumes are about 20 percent higher than during the slower months. If that pattern repeats itself this year, the ports could be in trouble once again.

It’s not simply the increased container volumes, but more so the surge of containers from the big ships that are causing most of the problems. In Los Angeles-Long Beach, the discharge and reloading of 5,000 containers in a single vessel call is considered normal now with the big ships, and 10,000 or more container moves per vessel call are occurring regularly.

The ports are scrambling to implement measures to deal with the surges this peak season and beyond. Oakland is considering four measures, said port spokesman Mike Zampa. The port is looking at running Saturday gates as a permanent condition, and it’s now a matter of determining how to operate a Saturday gate program and how to pay for it. Zampa said Oakland is also testing new technology to measure gate queue times so long truck lines can be quickly addressed.

Oakland is also looking for off-dock locations where containers can be dropped off and picked up after hours so truckers don’t even have to enter the marine terminals. The port is also looking at establishing a common chassis pool.

Recent innovations in Los Angeles-Long Beach such as container dray-offs to off-dock sites and segregating containers for high-volume importers so truckers can peel off the containers from a single pile without having to go deep into the terminals are producing positive results. The ports intend to expand those programs. Chassis-leasing companies are continuing to collect metrics on terminal requirements and they expect the gray chassis concept to be working as designed by the end of June.

Nevertheless, even if there are no further labor disruptions for the five-year duration of the new contract, the port and shipping communities at each of the West Coast ports said the old way of running vessel, yard and gate operations will not stand up as ships continue to increase in size. According to Alphaliner, carriers during the three-year period that ends on Dec. 31, 2016, will have entered into their global fleets 285 ships ranging in size from 7,500 to 20,000 TEUs.

Smith said terminals must immediately address operational deficiencies and extend gate hours in order to make it through the peak season, but in the longer term they will have to modernize their physical plants in terms of layout and automation in order to handle the big ships. That will take at least 10 years, if they start now, he said.

La Bar said truckers in Southern California are pushing for more continuous hours of operation. Every time a terminal closes for the lunch hour or between the end of the first shift and the beginning of the second shift, the traffic and cargo-handling rhythm are disrupted. Even if the terminals can’t go immediately to 24/7 operations, they can eliminate downtimes in the crucial periods cargo-handling hours, he said.

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

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