Mum ILWU, PMA negotiators likely dealing with productivity issues

Bill Mongelluzzo, September 19, 2014, JOC.com

 

Having reached a tentative agreement Aug. 26 on the crucial issue of medical benefits, negotiators for the International Longshore and Warehouse Union and the Pacific Maritime Association have spent the past month discussing operational issues at marine terminals.

 

Operating issues center on the goal of employers to improve terminal efficiency and the goal of labor to protect jobs, PMA President Jim McKenna said. The ILWU was not available for comment on Friday.

 

The contract negotiations have caused a good deal of angst for cargo interests since negotiators were unable to reach an agreement by the July 1 deadline. Nevertheless, cargo handling at West Coast ports has not been compromised, and the negotiations are continuing each day in San Francisco, McKenna said.

 

The PMA and ILWU have been remarkably successful in maintaining a blackout on news, with the only reports from the negotiations coming in the form of joint ILWU-PMA releases. It is still uncertain how far away the parties are from an agreement.

 

Despite the uncertainties, cargo volumes remain strong. According to PIERS, the data division of the JOC Group, West Coast imports year-to-date through August were up 6.2 percent. However, a number of  importers have been diverting at least some of their shipments to the East Coast ports, where ports there have been reporting double-digit increases in container volumes since July 1.

 

Nevertheless, dockworkers on the West Coast are not hurting for work opportunities. In Los Angeles-Long Beach, which handles more than 70 percent of the container volume on the West Coast, longshoremen in the week ending Sept. 12 worked 478,504 man-hours, which was 25 percent greater than the hours worked during the same week last year, according to numbers posted on the PMA website.

 

That was also 19 percent higher than the man-hours recorded in the busiest week of 2013. Some of the increase in man-hours could be because of problems terminal operators have been dealing with all year, such as chassis shortages and late railcar deliveries. Such events cause containers to back up on the docks, thereby requiring multiple handling of containers as longshoremen sift through stacks to retrieve containers. Truck turn times at the marine terminals have also suffered.

 

Productivity issues are an important topic at container ports around the world because of the big ships carriers are deploying on the major east-west trade lanes. These vessels discharge and reload thousands of containers in a single vessel call. In Los Angeles-Long Beach, for example, vessel calls today regularly produce 5,000 container moves, or more.

 

These spikes in cargo volume during a compressed window of time have thrown vessels off schedule, which has a ripple effect on calls at other ports in the rotation. These problems have surfaced this year on the busy routes linking Asia and Europe, resulting in vessel diversions and reports of heavy congestion at some of the busiest and most efficient ports in the world.

 

The mega-ships are also creating congestion and delays at North American ports such as Los Angeles-Long Beach, New York-New Jersey and Port Metroc Vancouver, British Columbia. It is therefore crucial that the PMA and ILWU negotiators can agree upon process changes to improve productivity.

 

Automation is viewed as one strategy to improve efficiency, and to increase the volume of containers that can be handled on the limited and costly waterfront land that marine terminals occupy. Automated horizontal transport, such as automated guided vehicles, are being introduced at some terminals in Southern California, as are automated stacking cranes.

 

While automation allows terminals to stack containers higher and move them faster, it also has the potential of eliminating jobs. A Port of Los Angeles report this spring concluded that at one of the terminals that is automating, TraPac, automation could result in a 40 to 50 percent reduction of jobs.

 

However, automation also creates new jobs, such as maintenance and repair work on the sophisticated cargo-handling equipment. Therefore, negotiations on manning requirements and the training of longshoremen to prepare them for the emerging work opportunities are important.

 

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