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.

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.

FIRES, HURRICANES AND PROTESTERS

Fires, Hurricanes, ProtestorsIt is not like we don’t have enough issues with congestion, chassis shortages and labor negotiations, let’s throw in a fire, a hurricane and a protest to further slow down throughput at California’s ports.

Swells from a hurricane earlier in the month caused $20M in damage to the breakwater protecting the Port of Long Beach. A fire at a pre-World War II wharf at the Port of Los Angeles billowed toxic smoke into the air and shut down Southern California container terminal operations for two days. “Block the Boat” picketers set up shop in Oakland on Saturday. Longshoremen refused to cross the line for “safety” reason. SSA was shut down for the day, and the ZIM ship left without being worked.

GIANT DUCK DESCENDS ON LOS ANGELES

Rubber DuckOkay, the title may be a little misleading, but a giant duck did indeed make a visit to the San Pedro Bay. The duck coming in at 61′ tall, 85′ wide, 110′ long and 11 tons was in town to lead the procession of ships at the annual Festival of Tall Ships. The duck will continue to be on display through September 6th. It was designed by Dutch artist Florentijn Hofman and has been all around the world spreading joy.

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.”

SOUTHERN CALIFORNIA PORTS GETTING THEIR ACTS TOGETHER

Gene SerokaGene Seroka (pictured left), an executive with APL, was tapped for the Executive Director job at the Port of Los Angeles. The post had been vacant since the retirement of Geraldine Knatz at the end of 2013.

The top spot at the Port of Long Beach remains unfilled since June 2013 when Chris Lytle left to take the helm at the Port of Oakland. With the political angst and contentious relationship between the Mayor of Long Beach (Bob Foster) and the Port of Long Beach, it has been difficult to recruit for the position. However, with Mayor Foster on his way out and the top two contenders for his job having no interest in playing puppet-master at the port, things are looking up down south.