Negotiations between ILWU clerical workers and employers at the Port of Los Angeles and Port of Long Beach will resume on Wednesday. By the end of last week, negotiators had accomplished little other than ironing out minor details in 14 separate contracts with shipping lines and marine terminal operators, said Stephen Berry, an attorney representing the employers. Larger items of contention remain unresolved. Picketing at marine terminals was suspended early last week.
In the meantime, cargo operations at both ports remain unaffected as negotiations now enter their third week. The contract with the nearly 600 full-time and several hundred part-time members of the Office Clerical Unit of the ILWU Local 63 expired at midnight on June 30. Although the breakdown in negotiations earlier this month resulted in pickets at five terminals, dockworkers were ordered to cross the lines by area arbitrators selected by labor and employers.
Items that remain unresolved between the union and employees deal with three issues:
- The union's demand that employers hire workers from the part-time "casual" pool any time a full-time worker takes a day off, retires or resigns. Employers want to use casuals only when needed.
- The union's attempt to overturn agreements reached during 2004 and 2007 contract negotiations that allow shippers to book cargo electronically. Employers say the loss of on-line bookings will put Southern California ports at a disadvantage against other ports in the nation and world.
- The union's demand for a 32 percent increase in pay and benefits over the next three years. Employers say the annual pay and benefits for clerical workers already averages $165,000, and they have made generous offers for increases.
Some of the largest importers and exporters in the nation urged negotiators representing ILWU office workers and those representing marine terminals at the Port of Los Angeles and Port of Long Beach to conclude contract negotiations before discretionary cargo is diverted to other ports. A letter from the Waterfront Coalition - representing manufacturers, retailers, product suppliers and exporters - was sent to negotiators early last week. The letter states, "A lengthy and contentious negotiation on a contract ... has the very real potential to further add to the urgency for shippers to consider alternative North American gateways for discretionary cargo. As we have learned from past congestion experiences, a significant share of this cargo never returns to the region." One member of the coalition said that while the letter was polite, the message it conveyed to the negotiators was "Are you insane?"
While negotiations between ILWU office workers and employers at the Port of Long Beach and Port of Los Angeles progress at a snail's pace, importers and exporters are becoming increasingly alarmed about the impact of a potential strike on their peak season cargo. "People are up in arms about this," said one Waterfront Coalition member. Importers and exporters already fear that peak season will bring gridlock to Southern California, due to long turn-times at terminal gates. "Every time one of these things happens in Southern California, they are shooting themselves in the foot," the member said.
In the meantime, the folks at the Port of Long Beach are trying to ease shippers' concerns about slow turn-times at terminal gates and potential peak season congestion. In a news release issued last week, port officials stressed that terminals are adding back their noon-hour relief and flex gates to process trucks throughout the day. In addition, a working group of port officials, terminal operators, shippers and trucking companies is studying proposals for a port-wide appointment system and modifications to the port's PierPass off-peak truck gates. Port officials say the modifications are needed "to speed up trucking transactions as cargo volumes have unexpectedly surged."
June proved to be a busy month at West Coast seaports as container volumes soared in response to consumer demand. The Port of Seattle posted the largest gains of any U.S. West Coast port, with total container volumes up 49 percent. Import containers were up 93 percent in Seattle, while export boxes were up 9.5 percent and empty containers surged by nearly 94 percent. At the Port of Los Angeles, total containers grew by 32 percent, while import boxes were up 32 percent, exports were up 12.6 percent, and empties were up 53 percent. The Port of Long Beach posted 25.8 percent container growth, with imports up 27 percent, exports up 1.8 percent, and empties up nearly 53 percent. At the Port of Oakland, total containers grew by 21 percent, with imports up 30.8 percent, exports down 11.5 percent, and empties up 209 percent.
The only major West Coast container port to report negative container growth last month was Tacoma, where total container volumes were down 3.4 percent from June of last year. Nevertheless, imports grew by 21 percent, while exports fell by 32 percent, and empties fell by 67 percent. Detailed Stats
Despite double-digit gains in container trade at U.S. West Coast ports in June, the leader in West Coast growth was the Port of Prince Rupert, B.C. The tiny port in the far northwest corner of British Columbia posted 52.6 percent growth in container traffic over June 2009. Import containers were up 40 percent, exports were up 73.5 percent and empties were up 121 percent. The sole container terminal in Prince Rupert was opened in October 2007 and currently works two ships per week. Last year, Prince Rupert's annual container volumes were roughly equivalent to 11 days' container traffic at the Port of Los Angeles. Nevertheless, the capacity of Prince Rupert's Fairview container terminal is expected to be quadrupled to two million TEUs in 2014. If warranted, port officials say they could add a second container terminal by 2020 that would increase the port's annual capacity to 5 million TEUs.
The surge in container growth may dissipate in the months ahead as consumer demand moderates. "Weak consumer confidence, slow job growth and flat confidence levels among CEOs. . . all support the slow growth scenario," say economists at the Conference Board, a global research association. Although the board does not forecast a "double dip" recession, experts say that economic growth during the second half of 2010 will not equal the first two quarters of the year.
Seattle artist Gabriel Campanario visited Port of Seattle docks last week with his sketchbook and came back with some fascinating illustrations and comments. Take a look at his perspective of the waterfront.
Port of Portland officials welcomed the first ship call from Westwood Shipping Lines last week, marking the return of direct calls between Japan and the Columbia River port. The arrival of the Westwood Victoria was a happy event for agricultural producers and wood product manufacturers located in the Columbia River Valley, upriver and inland from the port. Those exporters have been trucking their products to Pacific Northwest ports since "K" Line pulled its service from Portland last year. Westwood provides more direct calls to Japanese ports than any other carrier, with stops in Yokohama, Shimizu, Tokyo, Osaka and Nagoya. The carrier also calls in Busan, South Korea.
Meanwhile, folks at the Port of Oakland celebrated the inaugural visit of the APL Oakland last week. The 4,730 TEU ship sails on APL's Pacific Coast Express service which calls in China, Japan and Southern California before continuing on to Oakland. Port officials say that APL has the highest volume of any shipping line calling at the port.
Port of Long Beach commissioners tentatively approved a $12.4 million transfer of funds to the City of Long Beach last week but stopped short of approving a second $10 million transfer until an audit of the port's fiscal year 2010 net income is complete. The transfer of 10 percent of the port's net income to the City of Long Beach tidelands operating fund has become an annual event in recent years with $148 million being transferred since 1995. This year, the Long Beach City Council requested two transfers at the beginning of the port's next fiscal year on Oct. 1 - the first based on 2009 audited incomes, and the second requested before the port has completed an audit of its 2010 net income. Commissioners said they would attempt to complete the audit of the 2010 income by January of next year, about three months ahead of schedule. The board's action took place at a committee meeting prior to the regular board meeting and still must be approved by the full board.
Not all of the commissioners at the Port of Long Beach approved the transfer of funds to the City of Long Beach. Commissioner Mike Walter cast the sole "no" vote against the transfer after citing restrictions in the Long Beach City Charter. Those restrictions state that transfers should occur only if the city is unable to meet the lawful obligations of the tidelands operating fund that is used to maintain city beaches and marinas - and only if the port can afford the transfer without jeopardizing its operations. Yet Walter pointed out that the tidelands fund currently has a balance of $10 million and will have a balance of $15 million after the first transfer of funds from the port is completed. A second transfer of funds would boost the tidelands balance to $27 million. Walter said he could not justify supporting another transfer to the city at a time when the Port of Long Beach has a bonded indebtedness of $735 million and is projecting the issuance of additional debt as early as 2012. He also did not want to jeopardize the port's environmental program, which will need $100 million for shore-side power in the next few years.
The Port of Long Beach's transfer of funds to the City of Long Beach will not mark the conclusion of the city's request for assistance. Port officials also expect the city to request payments of $22 million for police and fire protection this year and $23 million for those services next year - even though the port has its own harbor patrol staff. In addition, the city is expected to ask the port for $6 million to help retire bonds for the Long Beach Aquarium of the Pacific.
Unlike ports in other parts of the country that receive tax revenues and operate as independent port authorities, many California ports operate as municipal departments yet receive all of their revenues from marine operations. Under California tidelands law, ports must operate for the good of all residents of the state and must spend their funds on commerce, navigation, marine recreation and fisheries. Yet the City of Long Beach and adjacent City of Los Angeles have found ways to transfer funds from their seaports by charging their harbor departments for services ranging from police and fire protection to legal representation. Other cash-strapped California cities that do not have seaports in their backyards lack the same ability.
All three finalists for executive director of the Port of Bellingham dropped out of the race last week following interviews with commissioners, a stakeholder group and staff panels. They also met with community leaders. Although the candidates were invited to continue to compete for the job, they withdrew their names from consideration, port officials said. Two other finalists dropped out of the race shortly before the interviews began. Commissioners have asked their executive search firm to revisit the 110 applications that were submitted in May and select more candidates for future interviews. They hope to conduct additional interviews by the end of August.
Seattle port commissioners have approved a $400,000 expenditure for a development study and environmental review for a portion of Terminal 91. The land has been used in a number of ways over the years, including U.S. Navy fleet support activities, breakbulk and vehicle cargo operations, and fish processing. Despite the construction of the Smith Cove Cruise Terminal on the southern portion of the terminal, much of the site remains vacant. The 15-to18-month study will assess the feasibility, environmental impacts and costs of various alternative uses for the site. A similar redevelopment effort launched in 2005 drew opposition when staff recommended a plan that would include biotech research and manufacturing and would require zoning changes. Port staffers now say that they want to accommodate expansion of marine related businesses and attract new compatible industries to the terminal.
The Port of Seattle board has voted to spend an additional $1.3 million for maintenance dredging at Terminal 5. Last week's board action increases the total amount committed to the project to $1.9 million. The funds will be used to dredge one berth at the terminal to minus-50 feet and two berths to minus-45 feet. Port officials said that the water depths are necessary to ensure access to the harbor by current and future deep-draft container vessels and that without the dredging, the vessels could be diverted to other ports. Dredging is expected to be completed by February 2011.
The number of rail cars idled by the Union Pacific Railroad has been slashed by 45 percent during the past year, UP officials report. During spring 2009, some 71,000 UP cars were sitting idle throughout the western states. That number has been reduced to 39,000 idled cars. The number of idled locomotives has been reduced from 2,100 to 1,300, and the number of furloughed employees has been reduced from 5,300 to 2,500. UP officials credit the increase in rail traffic for the redeployment of both equipment and employees. Total UP carloads and intermodal traffic has increased by 15 percent so far this year.
Long Beach commissioners have approved an expenditure of $825,000 to demonstrate the efficiency of a seawater scrubber in reducing stack emissions from container ships. The funds will be used by Bluefield Holdings, Inc., a consulting firm focused on marine emissions, and will be matched by the Port of Los Angeles. Bluefield will demonstrate the scrubber on an APL container ship to treat emissions from auxiliary engines while the ship is burning low-sulfur distillate fuel between berth and 24 nautical miles from shore and while the ship is burning heavy fuel oil between 24 and 200 miles from shore. The scrubber will be attached to the exhaust stacks from the engines, and seawater will be used to remove contaminants from the exhaust. The scrubber is expected to capture 99 percent of sulfur oxide emissions, more than 80 percent of diesel particulate matter and 90 percent of volatile organic compounds. It will be installed on an APL ship later this year and tested over an 18-month period.
L.A. City Councilmember Janice Hahn has taken over as the 2010-11 chair of the Alameda Corridor Transportation Authority's governing board. She succeeds Long Beach City Councilmember Gary DeLong, who will serve as ACTA's vice chair. Hahn takes over the board at a time when intermodal traffic is down on the 20-mile-long rail corridor linking the Port of Los Angeles and Port of Long Beach to transcontinental rail yards.
Randy Rogers, who has been the U.S. Maritime Administration's representative for Pacific Northwest ports, is headed to Iraq to be the next chief of staff for the Office of the Transportation Attache at the U.S. Embassy in Baghdad. He will assist the government of Iraq in rebuilding the country's transportation infrastructure and will work to secure American and foreign investment in the country. A replacement in MARAD's Pacific Northwest and Alaska Gateway office should be named soon.
Theresa Wagner has taken over responsibilities for communications, media relations and public relations at the Port of Vancouver USA. She replaces Nelson Holmberg who is the new port director at the Port of Woodland, WA. Prior to coming to the port, Theresa worked for U.S. Sen. Patty Murray.
-- The Cunningham Report
