Reid / ETC International Freight System
Coastal ports are re-routing some containers, please review the report from JOC Below.
International Shipping, Freight Forwarders in California, Air, Ocean, Shipments, Global Logistics
Shippers Plan Few Route Changes in Wake of Strike
Bill Mongelluzzo, Associate Editor | Dec 12, 2012 8:41AM ES
A Journal of Commerce survey found that cargo owners are flustered by the eight-day office clerical workers strike last month in Los Angeles-Long Beach, and the possibility of an East and Gulf Coast dockworker strike three weeks from now, but cargo diversion is not an option for many shippers.
Of the 128 importers and exporters surveyed, 39 percent said they will ship less cargo through the Southern California gateway in the future because of the strike by the Office Clerical Unit of International Longshore and Warehouse Union Local 63 from Nov. 27 to Dec. 4.
A total of 61 percent of the respondents said the OCU strike would not affect how much cargo they ship through Southern California in the future, and 63 percent of the shippers said they would not route their cargo through Canada or Mexico, or increase their use of ports there if they are already using those gateways.
Cargo interests are clearly anticipating a strike by the International Longshoremen’s Association at East and Gulf Coast ports after the contract extension expires on Dec. 29, with 78 percent saying a strike is likely.
While 48 percent of the respondents said they plan to divert cargo from the East Coast to ports on the West Coast or in Canada if there is an ILA strike, a number of shippers said diversion, logistically, was not an option, or, in the case of exporters, that overland transportation costs to the West Coast are too high.
Complete Coverage of ILA-USMX Negotiations
When diversion is considered, Prince Rupert and Port Metro Vancouver seem to be popular gateways. Those ports have good rail service to the U.S. Midwest. Some shippers are looking at ports such as Ensenada, Manzanillo and Lazaro Cardenas on Mexico’s Pacific Coast, but most shippers have no direct experience with those gateways.
Even those respondents that expressed a visceral dislike for longshore unions said that at the end of the day, supply chain logistics determine the routing of their cargo. Importers of Asian cargo with distribution centers on the West Coast cannot divert shipments to the East Coast. Importers with most of their customers on the East Coast could ship viaintermodal shipping rail through the West Coast, but the cost would be higher.
However, in the longer term, a number of respondents said they are concerned about dockworker labor actions on both coasts and are thinking more of spreading out their gateways, where possible, to hedge against strikes or employer lockouts on either side of the country.
Several respondents said they believe the OCU strike in Los Angeles-Long Beach will embolden the ILA to strike later this month or after the Jan. 1 holiday. All of the respondents who expressed opinions about the dockworker unions did so in an unfavorable manner.
Some respondents expressed the view that the Obama administration did not act quickly enough to end the OCU strike, and they said that would encourage the ILA to strike. But in 2002, when the entire West Coast was shut down by the employer lockout, it took 10 days for President Bush to seek a Taft-Hartley back-to-work order. In contrast, federal mediators were already on the way to intervene in the OCU strike on its eighth day, although four of the 14 terminals in Los Angeles-Long Beach remained open, and the other West Coast ports were unaffected by the strike. The strike ended while the mediat
Oakland Acts to Prevent Improper Spending
Bill Mongelluzzo, Associate Editor | Dec 10, 2012 5:25PM EST
The Port of Oakland on Monday implemented a plan to address lax oversight of business expenditures by port executives and guard against embarrassing, improper expenditures in the future.
Release of the action plan was accompanied by the announcement that James Kwon has agreed to retire as maritime director effective Dec. 28.
An audit this year revealed Kwon entertained clients at a strip club in Houston in 2008. The total bill for dinner and drinks was about $4,500. When the incident was revealed in an audit in October, Kwon was placed on administrative leave and Oakland Executive Port Director Omar Benjamin retired.
Oakland hired Arnold & Peter, an independent outside counsel, to investigate all business spending by port executives in recent years. The port has since received repayment for the alleged improper expenditure of public funds in two incidents.
The port on Monday released a “Matrix for Responsible Expense Practices” to govern future expenditures by executives. The matrix sets rules for spending on flights, hotels and meals that conform to industry best practices.
The number of employees holding port purchasing cards will be reduced, and the port will step up enforcement of policies, holding the cardholders and approving officials accountable.
“It’s a new day at the port, and we are pleased to be releasing comprehensive information on the problems we’ve faced and how we’re addressing them,” said Gilda Gonzales, president of the board of harbor commissioners.
The board on Monday released the investigative report by Arnold & Porter and the port purchasing card audit. Deborah Ale Flint, acting executive director, will lead a port administrative team that will oversee implementation of the new policy governing expenditures by port staff.
“I want to thank all of my fellow employees who, like me, greeted the revelations of Oct. 15 with a mixture of shock, embarrassment, anger and dismay,” Ale Flint said.
