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 January 26, 2015       

 

US WEST COAST CONGESTION HITS NEW HIGH AS ILWU, PMA LAY BLAME ON MANNING

Excerpt from Journal of Commerce | By: Bill Mongelluzzo |

Congestion at West Coast ports is the worst it has been since longshoremen began hard-timing employers in early November, and conditions are expected to worsen as terminal operators and the International Longshore and Warehouse Union use manning issues to see how much pain they can inflict on each other.

The strategies being deployed by the Pacific Maritime Association and the union are expected to continue even though both parties have agreed to negotiate their coast-wide contract under the auspices of the Federal Mediation and Conciliation Service. Employers and the union are intensifying their efforts to punish each other despite the involvement of the federal mediator in the negotiations.

Terminal operators, which are incurring huge expenses because of plunging productivity, have been attempting to cut back on labor costs wherever possible. For example, terminal operators stopped night gate operations in Seattle and Tacoma several weeks ago and in Oakland during the past two weeks.

 

[Photo Source: Despositphotos.com/designf21]

Most of the 13 container terminals in Los Angeles-Long Beach continue to operate night gates, but they recently stopped ordering longshoremen to work on vessels during the night shift. With mountains of containers building on the docks, employers said it had become counterproductive to unload more containers at night and add to the congestion. Therefore, the terminals in Southern California have maintained yard and gate operations at night in an attempt to make room for containers that would be discharged from ships the next morning when vessel operations resumed.

These actions, while based upon basic operating procedures, have a residual impact as well on work opportunities for longshoremen. Dockworkers in Seattle, Tacoma and Oakland have lost all of their night work, and crane operators in Southern California have lost their vessel work at night. When longshoremen don’t work, they don’t get paid.

The PMA said none of this would be necessary if ILWU crane operators in the Pacific Northwest ports would return to their normal productivity of about 28 container moves per crane per hour. Those numbers plunged below 20 moves per hour in late October when the ILWU began to implement work slowdowns to pressure employers in the coast-wide contract negotiations, the PMA has said numerous times since then.

In Southern California, the ILWU’s strategy has been to short employers the skilled yard crane operators that are crucial to keep containers moving through the yards and out of the gates. The PMA reported that in early November the ILWU locals informed employers that the number of yard crane operators the union would dispatch each day would decrease from 110 to 35. Horrendous delays and gridlock resulted immediately. (See chart on homepage of JOC.com.)

The ILWU disputes those numbers. “The shipping companies have 700 steady crane operators at their disposal, who are trained and certified, who do not report to the dispatch hall,” said Adan Ortega, spokesman for ILWU Local 13. “They are ILWU Local 13 members who are telling us that they are only reporting for work three to four days a week.”

Ortega said the manning decisions being made by employers, if reversed, would result in the dispatch of enough longshoremen “to staff a semi-full contingent of three gangs at night as well as the three gangs used during the day,” he said. Furthermore, crews being ordered by employers to work in the yards each day “are at 50 percent,” Ortega said.

Employers and longshoremen are paying a dear price as the manning war continues. The congestion and shorting of labor in Southern California have had the paradoxical result of increasing work opportunities for general longshoremen (those not trained to operate equipment), and subsequently boosting employer costs. According to numbers posted on the PMA website, for the four-week period ending Dec. 19, man-hours paid by employers to the ILWU were 20 percent higher than during the same period in 2013. Yet, the ports of Los Angeles and Long Beach reported that in December container volume in the port complex was down 1 percent from December 2013.

Even though general longshoremen are earning a good deal of money during this crisis as they pick up 20 percent more man-hours, skilled equipment operators are losing work opportunities if the union is purposely refusing to dispatch them, as the PMA has stated. This is playing into the PMA’s strategy, though, as employers would like to see longshoremen who are losing work opportunities to begin pressuring the ILWU negotiators in San Francisco to reach a contract agreement so everyone can go back to work.

The main issue that has been holding up the negotiations, at least for the past few weeks, is reportedly that the ILWU wants terminals to mandate that ILWU mechanics inspect each chassis before it leaves the terminals, and that employers give the ILWU mechanics jurisdiction over “red-lined” terminals where the International Association of Machinists does chassis maintenance and repair work. Also, the ILWU wants jurisdiction over off-dock sites operated by the chassis-leasing companies. Those companies are not members of the PMA. They have no contractual relationship with the ILWU and no obligation to hire ILWU mechanics to do M&R work on their chassis.

The ILWU mechanics account for about 10 percent of the registered longshoremen in Southern California, so the employers’ strategy is at least in part to stir up dissension in the ILWU by withholding work opportunities from the larger body of longshoremen who have no stake in the chassis issue.

While everyone is suffering during this standoff — longshoremen, terminal operators, shipping lines and the thousands of truckers who wait in long lines at congested marine terminals — cargo interests are also paying dearly. More than 100 shipper-related organizations in recent months have reported lost export opportunities, seasonal import merchandise being marked down in price because of late deliveries to the stores, huge charges for the late return of equipment and the significant costs involved in re-routing West Coast-bound shipments to ports on the East Coast and in Canada.

Meanwhile, terminal congestion is getting worse by the day. Gene Seroka, executive director of the Port of Los Angeles, told a West Coast conference of freight forwarders and customs brokers in San Diego in October that terminal operators were utilizing 90 percent of their available land because of the congestion. After 80 percent utilization, service is degraded because there is nowhere to store containers. This results in wasteful, multiple handling of containers. Last weekend, Seroka told the annual conference of the California Trucking Association in Monterey that marine terminal utilization is now running at 95 to 97 percent of the available land.

Our regulatory experts are monitoring the situation and keeping a close eye on labor negotiations, which began on May 12, 2014. In the meantime we are checking shipment status on a daily/hourly basis to see where our client’s cargo stands in movement towards its final destination. While we can’t control the situation we can keep you informed.

 

 The information contained in this newsletter has been compiled from various industry newsletters and other public sources. While we use reasonable efforts to furnish accurate and up-to-date information Page & Jones, Inc. is not liable or responsible for the accuracy or reliability of any information contained herein.

 



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