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ILWU and PMA trade charges amid West Coast slow down

Newsflash: Some carriers pull the trigger on container congestion surcharges

Carriers are set to charge $1,000 per FEU, also poised to start charging on intermodal door deliveries this week.

|Thursday, November 13, 2014

Some ocean carriers are beginning to say they will implement a hefty port congestion surcharge on their customers next week. 

Hanjin and CMA CGM both sent notices to shippers saying they will implement a port congestion surcharge starting Nov. 17. 

 Hanjin said the charge will apply to all U.S. and Mexico destined shipments received by Hanjin or its agent and discharged at West Coast ports in the U.S. or Canada. 

 It said the charge “is to cover the massive increase in costs arising from significant increases in port congestion and serious disruption to our normal course of operation due to labor unrest or action” as provided in its tariff.

By: Stas Margaronis 

| Nov 13 2014 at 09:22 AM | Ports & Terminals

Craig Merilees, spokesman for the ILWU (International Longshore and Warehouse Union) told AJOT that allegations by the PMA (Pacific Maritime Association) that the union is engaged in a work slow down at West Coast ports is, in fact, the result of “frustration by workers with the long-standing contract and congestion problems.”

The automation of two terminals, TraPac at Los Angeles and the OOCL terminal at Long Beach, are moving ahead with the cooperation of the ILWU, Merilees said.

Merilees does not deny that there has been a back up of ships waiting to be unloaded at the Ports of Long Beach and Los Angeles.

On November 12th, there were a total of 11 vessels at anchor waiting to unload at Los Angeles and Long Beach. There were 12 ships at anchor on November 11th and 14 ships on November 9th, according to Phil Sanfield, spokesman for the Port of Los Angeles. Normally, there are no ships at anchor unless a vessel arrives early, Sanfield said.

The situation has caused growing criticism from shippers, carriers and freight forwarders who largely blame the ILWU for the slowdown. 

The criticism comes from groups like the AgTC (Agriculture Transportation Coalition ) representing U.S. agricultural exporters, which sent a letter to President Obama on November 6th. 

The letter was also signed by leading shippers and the ATA (American Trucking Association) expressing concern about the disruption caused by the work slow down at West Coast ports. The groups are asking for federal mediation.

Long Beach Container Terminal

For the waterfront labor go-slows are seen as a legitimate tactic. 

A retired stevedoring executive with extensive California dock experiences said, “Obviously the union has used the slowdown to try and get concessions on issues that they feel are important. I don’t think they want a strike or a lockout. But this is a union where emotions sometimes make people shortsighted and lose sight of the bigger picture. The leadership is very subject to rank and file concerns about job losses. So if there is a growing feeling that this is happening, then this might push people to go in a direction that might not be a good idea.” 

An ocean carrier executive told AJOT, “I can’t understand how longshoremen on the West Coast can be so out of touch with workers in the rest of the country who aren’t in a position to take such risks with their jobs and their livelihoods. These disruptions are causing dislocations with shippers and retailers all over the U.S, and as Christmas time approaches, those impacts directly affect workers at stores and warehouses who depend on Christmas as part of their livelihood. Maybe it’s time the ILWU woke up to how it is impacting other workers.”

A California-based freight forwarder told AJOT,
“It’s appalling when a small group of people like the ILWU can hold the U.S. economy hostage by deciding not to work.” 

Adding, “The problem is that the slow down and dislocations start to snow ball and you already have a fragile supply chain.”

Merilees denied that there was a work stoppage by ILWU members at Oakland as reported by another publication. 

He said there was “a problem with safety issues and equipment that were raised by union members in Oakland with the result that the workers were fired by their employer.”

In a November 6th press release the Pacific Maritime Association (PMA) stated
“on November 3rd the ILWU informed the PMA it would not dispatch qualified ILWU members, most of whom have significant experience operating yard cranes in the terminal, placing cargo containers on trucks and rail cars for delivery to customers,” precipitating a slow down in cargo handling at the Ports of Los Angeles and Long Beach.

Merilees says the response by the ILWU was predicated “on a concern about long-standing safety and congestion problems” causing the reaction by the union.

Merilees said that a number of issues have contributed to congestion problems that have been long-standing and have yet to be resolved.

Merilees said negotiations are continuing and that the union has
“an intense commitment to reach terms for a new contract as quickly as possible.”

On a more positive side, Merilees noted collaboration between the ILWU and terminal operators in the automation of two new mega-terminals, the TraPac terminal at Los Angeles and the Overseas Orient Container Lines (OOCL) terminal at Long Beach.

Differences between terminal managers and ILWU Local 13 representing Long Beach and Los Angeles longshore workers have been resolved, he said.

Merilees noted, however, that at Long Beach, OOCL reached out to the ILWU and involved the union and workers in the early planning and development of the automated terminal project so that differences have been resolved before the terminal goes into operation in 2015.

The situation was very different at TraPac, he said, where the terminal management did not involve the union in the planning stages and took on “it’s a my way or the highway approach.” 

Merilees alleged that when the equipment was tested several months ago there was an “equipment meltdown and concern by the ILWU about the safety of its members working at TraPac.”

Fortunately, he added, “Los Angeles Mayor Garcetti intervened at that point and the ILWU and TraPac agreed to a resolution of outstanding issues.”

Frank Pisano, executive vice president at TraPac told AJOT there were
“technological issues in getting the new terminal operational but there was no equipment meltdown.”

Pisano said that there has been an exchange of information between TraPac and the ILWU going back two years,
“but there is a grey area as to how much information you can share and how much needs to be proprietary.”

Today, Pisano says the terminal is operational and “we have weekly meetings with the ILWU.”

Stas Margaronis

American Journal of Transportation

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