CONGESTION!

121We certainly wish it was the kind of congestion that could be easily relieved with Mucinex or Sudafed, but alas, we are talking about the kind of congestion which creates long truck queues, delayed vessels and missed deliveries. The kind of congestion plaguing West Coast ports and contributing to Black Friday sale items and Christmas merchandise still sitting on the dock. The kind of congestion where the entire network struggles to move containers.

PORT OF OAKLAND PROTESTCertainly, one of the main factors contributing to the congestion is the unsettled ILWU contract…more on that later…but a contract agreement will not be the panacea as the causes of the congestion run deep.

The introduction of big ships, carrying two to three times the number of containers of previous vessels, dump a tremendous number containers on dock putting a strain on terminal operations. Additionally, these mega-ships take longer to unload/load, thereby, keeping ships in port longer and disrupting vessel schedules.

The changing chassis model is another reason. As ocean carriers divest themselves of these assets, the chassis providers are challenged to keep up with the necessary supply. It is not just a matter of the number of chassis but also having them available at the specific marine terminal where they are needed.

The growing vessel alliances play a factor in the “equipment challenge” as vessel partners call several terminals within the same port complex. This spreading-out of calls creates inefficiencies in the supply of chassis and containers. Motor carriers are forced to make multiple stops, chassis from one location and container from another, to complete one container move. These multiple stops add to the congestion, queues and ineffectiveness of the supply chain.

The limited gate hours, especially in Oakland, contribute to the backlog. When a marine terminal routinely stops taking transactions at 2:15pm, it makes it very difficult to move the required number of containers off-dock in a day. Basically, if the driver is not inside the terminal gates by lunchtime, he is not getting in. For all intents and purposes, that is a half day’s work lost.

Add to the above factors, the general busy-ness this time of year…exporters are eager to get their newly harvested goods to overseas markets, and importers are eager to get products on the shelves for holiday shoppers…and you have the perfect storm for congestion.

IN MEMORY

132Last month, we lost one of Devine’s finest drivers, Michael Kenneth Cook. Mike passed away unexpectedly in his home on November 7, 2014. He drove for Devine for 20 years. He will be missed and fondly remembered for his helpful nature, fun spirit and wily smile.

FROM NORTHERN NEVADA

From Behind the Dock DoorsBe part of the in crowd…Nevadans pronounce the second syllable of their state’s name with using the /ae/ vowel, as in “bad.” It is often mispronounced with the /a:/ vowel, as in “father” which immediately distinguishes derelicts and outsiders from true Nevadans.

FROM THE DRIVER’S SEAT

11Surprise CARB Inspections

In an effort to crack down on trucks which are not in compliance with state’s emissions and diesel particulate filter standards, the California Air Resources Board (CARB) set up a surprise inspection station on Highway 99 in Fresno. They cited nine trucks for violations. The fines range from $300 to $1000/month depending upon the infraction.

Devine runs a fleet of trucks CARB-compliant through 2021 and beyond.

ILWU CONTRACT NEGOTIATIONS SOUR

38The contract negotiations between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) are not going well. On November 20th, the ILWU put the negotiations on hiatus until December 2nd and rejected the PMA’s request for a contract extension. These actions caused a wave of anxiety for West Coast shippers… and motor carriers!

The two sides have also begun sparring in the press.

Here are two PMA press releases Nov 13 and Nov 20.

Here are two ILWU press releases Nov 3 and Nov 10.

Industry groups have written to the president and met with administration officials in hopes of bringing in a federal mediator to assist with the stalled negotiations. The president’s response, “Just last year, there was a long negotiation at the East and Gulf Coast ports,” Frank Benenati, a White House spokesman, said in an e-mail [to Bloomberg News] today [November 18]. “And just as the two sides in that case were able to resolve their differences through the time-tested process of collective bargaining, we’re confident that management and labor at the West Coast ports can do the same.”

Confidence in the bargain process…really?!?!?! This is an incredibly unhelpful and uninformed statement. When the ILA and USMX negotiated their contract covering East and Gulf Coast ports last year, the sides did indeed request the assistance of a federal mediator. The mediator’s involvement was pivotal in reaching an agreement.

In lieu of assistance and progress, we are confident the work slowdowns, work stoppages and labor shortages will continue.

THE LONG ARM OF CONGESTION

123The effects of containers stacking up at West Coast ports is far-reaching. Inland rail depots in Chicago and Memphis are experiencing inconsistent surges of cargo. There are not enough trucks to move the containers out in the limited free time available, and the winter weather is not helping.

Container vessels, 20 at the latest count, sit outside the ports of Los Angeles and Long Beach. The longer these ships sit, the more issues it creates downstream for other ports both in the US and abroad. Berthing times at busy ports around the world are very difficult to come by, and when they are missed, it could be days before a slot opens up. It has become such a problem that Evergreen is dropping Los Angeles and Oakland port calls from its NUE service.

It has also been surmised the lack of fluidity in containers and vessel schedules, will likely result in container shortages in Asia…just in time for the pre-Chinese New Year push.

Let us not forget the long-term effects on the psyche of the West Coast shipper. The congestion and labor unrest continue to tarnish the reputation of West Coast ports and drive business to other gateways on the East and Gulf Coasts as well as Canada and Mexico.

PORT OF OAKLAND NAMES TWO NEW EXECUTIVES

127In October, the Port of Oakland named Mike Zampa as Director of Communications. He is responsible for all internal and external communications for the port. Mr. Zampa has more than 25 years of communications experience. He previously worked for Bank of America and most recently had an 8 year tenure at APL.

126In November, the port named Beth Frisher its Manager of Maritime Business Development. She will be responsible for all sales, marketing, business development and customer relations at the port. Ms. Frisher is a former Maersk executive where she spent 18 years in various roles both in Denmark and the US. Her most recent assignment was Director of Marketing and Communications for Maersk Line Ltd, the company’s US government business subsidiary.

DROUGHT MONITOR

129Despite the record-low rainfall, the state’s crops of Almonds, Raisins, Rice, Prunes, Wine Grapes, Broccoli, Tomatoes, Lettuce, etc managed to still produce solid crops. However, if the lack of precipitation continues this winter, 2015 will be a whole different story.

Check out the state’s drought monitor website here.