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.

GERALD DESMOND BRIDGE DELAY

Gerald Desmond BridgeThe Gerald Desmond Bridge, which is the primary route to the Port of Long Beach, has for years been in desperate need of repair. It got so bad a net was placed under the bridge to catch the concrete chunks that were breaking loose.

Finally after years of wrangling, the project broke ground in January 2013 and was originally expected to be completed by end of 2016. However, due to setbacks attributed to CalTrans delays in approving the design, the repositioning of oil wells and mis-mapped underground utility lines, the new bridge is slated to be finished by the end of 2017 or possibly even the beginning of 2018. As we have grown to expect with every major infrastructure project, there are cost overruns. The original budget for the project was $950M and is now $1.26B.

Rather than a traditional design-bid-build project, the Port of Long Beach chose a design-build project where the construction begins while 70% of the design is approved.

The Gerald Desmond Bridge Replacement Project is a joint effort of Caltrans and the Port of Long Beach, with funding contributions from the U.S. Department of Transportation and the Los Angeles County Metropolitan Transportation Authority (Metro).

BOTH SOUTHERN CALIFORNIA PORTS HAVE NEW EXECUTIVE DIRECTORS

Gene SerokaAs expected, the Los Angeles City Council unanimously confirmed Gene Seroka as Executive Director, Port of Los Angeles. Mr. Seroka’s appointment has received praise from the industry, and he has already hit the ground running at the port.

 

 

Jon SlangerupNot be outdone by their Southern California competitor, the Port of Long Beach recently announced the appointment of Jon Slangerup as their Executive Director, a post vacant since Chris Lytle left for Oakland a year ago. Mr. Slangerup was the former President, FedEx Canada and has a “strong operational and environmental track record.”

Long Beach Ousts Port Commissioner

Thomas FieldsIn an unprecedented move by the mayor of Long Beach, Bob Foster, the city council voted to remove harbor commissioner and board president Thomas Fields.  The mayor and Mr. Fields have disagreed on many issues including a proposal by Fields to move the port’s headquarters to downtown Long Beach.  The mayor cited “excessive travel” as reason for recommending his firing.  Fields, however, said the trips to Asia and Europe were necessary to meet with ocean carrier executives during a period of unparalleled upheaval in the industry.

Many industry officials, ocean carriers and terminal operators see the removal of Fields as very unsettling for the Port of Long Beach.  During a time of intense change, expanded vessel sharing agreements and consolidation, the port has neither an executive director nor a deputy executive director and now two vacant port commission seats with the removal of Fields and resignation two days later of Nick Sramek.  Former executive director, Chris Lytle, left Long Beach over the summer for the top spot at the Port of Oakland.  With all that drama, bet he’s never looked back.