TRAPAC WOES

truck-queueJust when you see a light at the end of the long congestion-tunnel, BAM, the lights go out.  This time, it is TraPac that is leading to the long truck turn times in Oakland.

TraPac’s increased volumes have had a negative impact on queues and terminal transaction times. They are working to alleviate the congestion, but it will not be an immediate fix.  As we know, there are no quick fixes to congestion.  Here are some of the initiatives and plans TraPac has in place and the timeline for implementation:

Before the end of the year:

  • Install four additional cranes to speed up the deliveries of grounded import containers.
  • Implementation of an appointment system to even out the truck flows in the import grounded stacks.

Q1 – Q4 2017:

  • Expand footprint by 57 acres, nearly doubling its size.
  • Acquire two additional vessel berths.
  • Total expansion expected to take 11-12 months.

Q2 – Q3 2017:

  • Expand the ingate facility to improve truck velocity.
  • Implement new gate and yard technology for better truck and cargo flow.

We are appreciative TraPac is taking action to correct the slow turn times, but, boy, do we wish there was a major wand because it is going to take a while.

100 LONGSHORE WORKERS ADDED

It has been a difficult summer. The on-going labor shortages in Oakland have negatively affected terminal operations and, therefore, driver productivity.
However, hope is on the horizon. The Pacific Maritime Association (PMA) has agreed to promote 100 casual to registered longshore status and hire an additional 400 casual laborers.
This news is welcomed by all using the Port of Oakland.

ILWU in Action 002

PRODUCTIVITY…LET’S TALK APPLES TO APPLES

Port of Oakland expansionWhen we talk about terminal productivity, we are talking about yard and gate operations, meaning how quickly we can get a driver in and out of the terminal. When terminal operators and ocean carriers talk about terminal productivity, they are talking about vessel operations, that is how quickly they can work a vessel, get containers discharged/loaded and get the ship back out to sea.

In Oakland, and around the country, we have been plagued by poor terminal productivity…our type of productivity…the one that ties our hands and disables us from getting drivers turned and containers picked up and delivered. We have discussed this issue in our monthly newsletters for the past year. The delays. The congestion. The frustration. The driver exodus. It has gotten so bad the FMC is even looking into the problem.

But, what can we do to fix it? The answer isn’t something the industry wants to hear. Pay more.

Terminal operators need more robust incomes in order to provide the service and operating hours necessary to move containers in a fluid and efficient manner. Additionally, we are going to have to pay our drivers more to compensate them for the lack of turns they are able to achieve.

THE STATE OF THE NORTHERN CALIFORNIA DRAYAGE MARKET

Fwy w Rolling Hills 016Yesterday, three drivers walked into our office, laid their keys on the desk and quit. They cite the lack of productivity at the marine terminals in Oakland as the reason. They can no longer make a living.

A driver used to be able to consistently make two turns between the Central Valley and Oakland. That is no longer the case. Terminal turn times coupled with abbreviated operating hours have significantly cut into driver productivity and, therefore, earnings.

There was a time in the not-so-distant past when there were eight smaller marine terminals in Oakland and volumes were dispersed more evenly among those terminals. If one terminal experienced congestion, motor carriers could more easily adjust their operations to avoid that terminal on that day. Now there are five terminals, with two taking the lion’s share of the volume. There is no way to avoid the congestion…the lines…the loss of income…the frustration.

We understand the rationale for the recent terminal mergers and closures. Small operations lack the density required to be profitable. However, the result is the financial burden has now shifted to the driver. Such a shift is neither sustainable nor acceptable.

Drivers’ incomes are a factor of their base pay and the number of transactions they conduct in a day. In order to make a living, if the number of transactions decrease, the pay per transaction needs to increase.

With the nationwide shortage of truck drivers, these guys and gals have options. National and regional truckload/LTL/flatbed carriers are more than eager to snap up discontented drayage drivers. Why not? These drivers have experience, good driving records and know their way around the geography. It’s a slam-dunk for them. But, a major setback for the logistics community in Northern California.

We cannot afford to lose more drivers. As a result of the California Air Resources Board (CARB) truck retirement schedules, we experienced a reduction in drayage truck capacity in Oakland of 20-25% in January 2013 and another 20-25% in January 2014. Terminal inefficiencies and reduced hours of operation do not allow for the proverbial “doing more with less.” Quite the contrary, we are doing considerably less with less. Drivers are making considerably less and, as we witnessed yesterday, leaving the industry as a result.

Drivers can no longer be expected to shoulder the costs of inefficiencies and inelasticity in the supply chain. The system, as it currently stands, is broken. Clearly, throwing more drivers into the mix is not going to solve the problem. Paying the drivers more is not going to solve the problem. Improving operations with more gates, more hours, more yard equipment, more grey chassis pools, more man-hours and more money is what is needed to solve the problem.

 

“I quit! I can’t deal with it anymore!”

“I quit!  I can’t deal with it anymore!” are the words we heard this past Friday from a driver who could not face one more day at the marine terminals in Oakland.  The lines, the disrespect, the lack of productivity and income all contributed to his decision.  It’s becoming something motor carriers are hearing far too frequently.

We, the industry collectively, cannot continue to sit idly by and bang our heads against the same wall.  We cannot continue to allow the drivers to shoulder the burden of an inelastic and inefficient system.  The continual downward rate spiral in the TransPacific trade has put pressure on the ocean carriers to cut costs.  Ocean carriers look to their terminal operators to reduce pricing.  Terminal operators now no longer have the flexibility to operate on holidays/extended hours, purchase equipment, invest in technology, or order additional labor.  The network is stretched, and there is no elasticity left to ebb and flow with the business.  When it breaks, waves are sent through the supply chain…vessels back up, containers stack up and drivers line up.  And, right now, it’s broken.  It’s going to take everyone’s involvement to fix the problem.

Improvement in terminal turn times is necessary to stop the exodus of  drivers from intermodal trucking.  We are hearing reports of congestion surcharges being implemented. While it’s not a solution, it gives drivers some compensation for their time and lack of income.  Over the summer, we implemented such a surcharge and rescinded it when we saw a glimmer of improvement.  Operations have returned to static levels, and we are again considering such an action.