Bill Mongelluzzo, January 15, 2015, JOC.com
Ships are backing up rapidly at the major West Coast gateways following a decision by employers to stop working vessels at night in order to concentrate on clearing out congested marine terminal yards.
The Marine Exchange of Southern California reported today that 13 container ships were at anchor and awaiting berthing space in Los Angeles-Long Beach. Oakland reported that 7 container ships were at anchor and Tacoma also reported seven container ships at anchor. Although the ports have had vessel backups since last fall, the numbers are now accelerating.
Congestion began to mount at West Coast ports last summer due to a spike in container volume, chassis shortages and dislocations and service degradation on the intermodal rail networks. The knockout punch came at the end of October, according to the Pacific Maritime Association, when the International Longshore and Warehouse Union implemented a policy of work slowdowns and refusals to dispatch sufficient skilled labor to perform yard work in order to gain leverage in the ILWU-PMA contract negotiations.
Port executives today say that most of the container terminals are now at 90 percent of capacity, or higher, which they say puts the terminals on the brink of gridlock. Unless containers can be removed from the yards, the facilities eventually will reach the point where they can no longer accept more containers from the vessels.
Therefore, employers toward the end of 2014 began to reduce the number of work crews, or gangs, assigned to unload vessels on the night shift. They gradually cut back on vessel work at night, and by Wednesday this week, all vessel work at night had been discontinued in Seattle-Tacoma, Oakland and now Los Angeles-Long Beach.
Employers said this policy helps the terminals in two ways. With no containers coming off the ships at night, the terminals are able to devote all of their resources on the night shift to cleaning up the yards and making space for containers that will be discharged from the vessels the next morning.
Also, according to the PMA, the ILWU for the past 10 weeks has refused to dispatch sufficient skilled labor to operate yard cranes. Therefore, although the ILWU has stated that it makes hundreds of workers available for each shift, the refusal to provide sufficient yard crane operators effectively renders some gangs useless. By eliminating vessel crane work opportunities at night, employers hope there will be more yard crane workers availabe for day and night shifts.
“This decision was not made lightly,” said PMA spokesman Steve Getzug. “The ILWU’s ongoing refusal to dispatch sufficient yard crane drivers, the very workers who can best clear congestion at Los Angeles-Long Beach, led to PMA’s decision to halt night vessel work. It is essential to deploy every available crane driver to relieve the crushing congestion on the docks,” he said.
The ILWU disputes the employers’ reasoning. Adan Ortega, spokesman for ILWU Local 13 in Southern California, noted that terminals have been steadily reducing vessel gangs from as many as eight on the biggest ships in July to three gangs after July to one gang beginning New Year’s Eve and now to zero on the night shifts in Los Angeles-Long Beach.
“By my calculation, that is over an 85 percent reduction in the overall workforce since July. By what stretch of the imagination would anyone think that the congestion that existed before the contract would not worsen?” he said.
Carriers knew their vessels would back up at the ports as labor was pulled from ship work at night. In fact, carrier representatives dominate the PMA board of directors, so they factored heavily into the decision-making process. However, employers see this as a last-ditch effort to avoid even more draconian measures, such as an employer lockout such as occurred in the 2002 contract negotiations. Some employers are reportedly considering a lockout to be a viable option as shipping lines and terminal operators continue to bleed cash.
Furthermore, by cutting back on work opportunities for longshoremen, especially the skilled equipment operators that earn more money than those dockworkers without such skills, employers hope that the rank-and-file will pressure ILWU negotiators to resolve the outstanding issues with the PMA and reach a settlement. A major issue yet to be resolved concerns ILWU jurisdiction over chassis maintenance and repair. However, the vast majority of longshoremen have no stake in issues involving ILWU mechanics.
The lengthy contract negotiations, and now the backlog of vessels at West Coast ports, have proved to be quite costly for shipping lines. Today’s big ships cost more than $100 million each. Carriers estimate they lose more than $40,000 each day that a vessel sits idle. There is also the frustration expressed daily by their customers whose merchandise is sitting on the vessels that are stuck at anchor rather than on the store shelves.
Maersk Line spokesman Tim Simpson said the company is focusing on those factors that it can control. Maersk is in constant contact with its customers and vendors, informing them of the steps that are being taken to discharge the containers and move them from the terminals, and providing customers with updated information on delivery times.
Likewise, the terminal operators are doing what they can to clear the container backlogs so the vessels can be worked as quickly as possible and the gate operations will be improved, said John Cushing, president of PierPass Inc., which represents the 13 container terminals in Los Angeles-Long Beach. In addition to the normal five weekday gates, four night gates and one Saturday gate that are now standard operating procedure in Southern California, most of the terminals have added extra night gates as well as Sunday gates to help relieve congestion being experienced by truckers, Cushing said.
In December, the terminals ran 72 additional gates beyond the normally scheduled 10 gates they operated each week under the PierPass program, he said.
Carriers are also beginning to look at extraordinary measures to avoid congestion on the West Coast, with at least one line supplementing its regularly-scheduled weekly all-water services to the East Coast with ad-hoc sailings of additional ships, known as extra-loaders, on all-water services to the East Coast.