Your full container Loads & the on-going International Longshore & Warehouse Union along the US West Coast.
West Coast Labor Talks according to Zim Lines
The contract for the ILWU, which represents port workers along the US West Coast, expires at midnight on June 30. Both the ILWU and their management, represented by the PMA, have presented their initial contract requirements which remain far apart. Given the disparity in demands, trade professionals are anticipating some level of West Coast shipping disruption in the form of work slowdowns or stoppages. Many shippers have diverted cargo to Canadian ports or US East Coast/Gulf ports to avoid interrupted supply chains associated with the
negotiations. According to a Journal of Commerce survey of 221 shippers, two-thirds of
respondents planned or had already arranged for alternate shipping routes by Mid-May. Bookings for all-water routes to the East and Gulf Coasts and to Canada have quickly filled, leaving other shippers to potentially ride out the negotiations. In the event of any labor unrest associated with the West Coast port negotiations, ocean carriers have announced intentions to assess a Congestion Surcharge of $1000/40FT regardless of the port of discharge or ramp location.
US west coast dock talks to cause port slowdowns, cargo diversions
A FREIGHT newsletter is raising fears that the west coast International Longshore and Warehouse Union, currently in contract talks, will likely engage in slowdowns to provide leverage in negotiations rather than to strike outright. FTR Transportation Intelligence's
State of Freight Today newsletter said the ILWU will likely stress market until "port operators and shippers suffer enough to make concessions". With bargaining talks over the next three months expected to be difficult and supply chains in North America "strongly
affected", shippers have been "moving up their orders and shifting routing," said FTR Transportation Intelligence's managing director Noel Perry.
"Intermodal Association of North America data indicates that movements of international containers on rail were up over 11.5 per cent year over year in April," he said. A recent survey
found two-thirds of international container shippers were contemplating moving a portion of their west coast volumes through other ports, reported American Shipper. Mr. Perry said ports in the northeast will have trouble handling such a big shift in volume as they are already congested and have seen adecline in productivity owing to the shift to bigger ships, resulting in a concentration of activity on some days and little activity on others.
"This leads to congestion and reduced capacity utilization in fixed facilities and drayage trucks," said Mr. Perry, and that the driver shortage has hit the port drayage market very hard. He added that the shift by the ocean liners away from supplying
chassis has been plagued with spot shortages owing to equipment hoarding by
truckers. Railways are also troubled by the uneven daily
volumes coming out of northeast ports from barge ships, and inland drayage
operators are having the same drayage problems as in the northeast.
"This predicament reminds us of what we have learned about the overall
trucking market. Fifteen years of difficult conditions have stripped the market
of its surge capacity, the kind of buffer that mitigated problems in the past.
"Until shippers become willing, again, to fund surge capacity, they will suffer when the market is stressed by any outside force that demands extra capacity: bad weather, new regulations, sudden growth - or contentious contract negotiations on the west coast,"
he said. US west coast ports handle 12 million TEU a year, or 43 per cent of container port activity, equivalent to 26 million truck movements and 5.1 million intermodal moves.
(Bottom-line, please make sure your customers have all their inbound freight off the west coast ports before the July 4th holiday, even if that means the container was pulled to a storage yard. If there is any labor action and the ports are closed, the containers will be stuck and they will incur demurrage. Also, all of the carriers have filed congestion surcharges of $1000/40FT that will kick into effect REGARDLESS of the port or ramp location once the west coast is deemed congested. This surcharge is anticipated to take place in late June. Encourage your customers to accept delivery as quickly as possible and do not leave containers sitting at the port or ramp any long than necessary. Hence, paying a pre-pull charge and local FCL storage will be
significantly less expensive than paying a congestion surcharge or worse yet
not being able to get to your freight if the port is closed.)
ILWU demand for two-year contract linked to Obamacare penalties
DOCKERS on the US west coast want a two-year contract while the maritime employers are pressing for a six-year deal. Speculation is rife that a short contract would expire before the next US presidential election in 2016, which might lead to a change in Obamacare,
recent legislation that penalizes the union's "Cadillac" medical coverage. Some speculate that the International Longshore and Warehouse Union (ILWU) does not want to be stuck with an unsuitable contract terms whatever the political outcome, leaving dockers room to change health care demands at a better time. Both the International Longshore and Warehouse Union,
representing 23,000 dockers in 29 ports between Canada and Mexico, and the Pacific Maritime Association of 80 employers have agreed not to comment
publicly on progress of the talks.
ETC International Freight System is a Federal Maritime Commission (FMC) licensed, as a non vessel operator common carrier (NVOCC) bonded, an ocean service contract holder & ocean consolidator providing services to and from world destinations. ETC and its freight network accesses yearly volume ocean contracts from a variety of steamship lines. Through us, our customers obtain wholesale pricing with savings passed down to them. www.etcinternational.com