Cargo on the Move

  • 03/05/2015
  • Reporters Desk

There’s an Agreement, but a Ratified Contract is Still Weeks Away
By Terelle Jerricks, Managing Editor
From the deck of USS Iowa on Feb. 23, ILWU Local 13 President Bobby Olvera said to the states buried in snow on the East Coast, “Your goods are on the way.”

Olvera said the Local’s 7,000 workers are committed to working seven days a week and around the clock to get the cargo onto store shelves.

But in the case of the Southern California ports, that’s three months of port congestion to get through. And, the agreement is just a tentative one until the membership votes on and approves the contract.

In the coming weeks, negotiators will meet with 90 delegates representing all the locals on the West Coast to review the contract. The Pacific Maritime Association will do the same with its membership.

The delegates are able to make a recommendation. After reviewing the contract, it is mailed to the rank and file of the ILWU membership, which will then have the opportunity to  discuss the contract with fellow members. Then, a secret ballot will be conducted to approve it.

In the unlikely scenario that the membership votes against the contract, it would be sent back to the negotiators to iron out the differences.

However, there are other rays of light at the end of the tunnel. On March 1, three companies that own most of the chassis serving the Port of Los Angeles activated a “gray chassis fleet” of truck-trailers in an effort to improve the flow of goods.

The landmark agreement among Direct ChassisLink Inc., Flexi-Van Leasing Inc. and TRAC Intermodal will give terminal operators and trucking companies at the twin ports more flexibility in obtaining chassis. Chassis are the wheeled trailers used by trucks to haul cargo containers.

Eleven of the 13 container terminals at the ports of Long Beach and Los Angeles, as well as the off-dock rail yards, are expected to participate. The two remaining marine container terminals use their own equipment, but could opt to participate in the future.

Port of Los Angeles and Long Beach chief executives Gene Seroka and Jon Slangerup—both of whom have backgrounds as transportation executives—applauded the agreement in a jointly-released statement.

“This is a historic agreement that will help our ports overcome a major challenge that has played a significant role in the congestion we’ve experienced,” said Slangerup, a former president of FedEx Canada.

Seroka, former president of Americas at APL Limited, called the agreement, “a major step forward in addressing the congestion issues that have challenged the San Pedro Bay cargo flow in recent months.

“The gray chassis pool, along with other initiatives underway to improve efficiencies, will help our marine terminals move effectively toward restoring cargo flow through this important gateway.”

“Chassis imbalance”—a phenomenon created by pools of non-interoperable chassis—was identified as the culprit of the congestion at the ports. The new agreement will allow more than 80 percent of chassis in service at the ports to be used interchangeably.

The agreement creates a new chassis supply model from each of the three pool operators overseeing the daily logistics of 81,500 chassis. The pools will remain commercially independent, with each chassis provider competing for business and setting its own leasing terms and rates. A separate third-party service provider will manage billing and other proprietary information.

Another ray of light appeared in the Feb. 27 edition of the Journal of Commerce. It reported that the Port of Los Angeles was teaming up with terminal operators and harbor drayage company, TTSI, to launch a container free-flow operation also aimed at reducing port congestion, while efficiently delivering import loads to retailers and other large shippers.

TTSI serves a core group of beneficial cargo owners, like Walmart,  Target and Best Buy that take control of their imports at the port of entry. Together, beneficial cargo owners generate a critical mass of imports each week.

Four marine terminals that handle imports from beneficial cargo owners—APL, APMT, Yusen Terminals and West Basin Container Terminal—unload these imports from the vessels and stack them in a block. TTSI truckers “peel off” the containers from the block and take them to the Pasha yard in the Port of Los Angeles.

Either TTSI or other truckers take the loaded containers to the beneficial cargo owners’ distribution centers in the region. The drivers then pick up empty containers at the distribution centers and return them to the harbor.

This closed-loop operation offers the benefit of reducing congestion at the marine terminals by draying off 400 to 500 containers a day as soon as the import loads are discharged from the ships.

This results in quicker turn times for truckers without running into jurisdiction issues with the ILWU.

Improvements in the movement of cargo at ports are stacking up every day. It’s still a question as to whether these improvements will steer the ports away  from the congestion issues they experienced in the past nine months.

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