The Port Community
West Coast Ports 2010: The future of West Coast port productivity?

By Peter Hurme

At Cargo Business News’ Port Productivity Conference in Long Beach, Calif. in early October, Bill Payne, the executive vice president and COO of NYK Line outlined what he admitted was a “narrow comparison” between the L.A.-Long Beach container port complex’s vessel-handling productivity versus its East Coast counterpart in New York-New Jersey.

Payne said both ports’ container facilities have some fundamental similarities with regard to how the marine terminals are run with on-dock and near-dock rail, waterfront labor, large urban populations and what he said was “high profile political interaction with local government.”

However, Payne said that it costs NYK and its alliance partners $15 more per box per move on an 8,000-TEU vessel in LA. -Long Beach over New York-New Jersey, translating to 5,000 moves at $75,000 per call. At 52 calls annually, it is nearly $4 million more in labor cost, he said.

Payne’s other suggested, competitive improvements for the Southern California box ports should include on-dock rail cars that are built by destination and dispatched sooner in order to reach markets quicker.

Real automation sooner than later?

Another fellow panelist, Ed DeNike, president of SSA Containers, the Seattle-based marine terminal operator, said:” We feel the only way we’ll survive is to cut costs,” such as through technology applications like automation.

SSA looked at productivity opportunities including dual-hoist of containers, which has been utilized by some terminal operators in Asia. “We’d love to be the first on the West Coast to do it but you need more people to do it,” DeNike said referring to the cost of labor at the U.S. Pacific ports.

DeNike said SSA is planning, in part, to cut costs and improve container throughput productivity via centralized gate operations, and implementing an automated container-handling grid at the Port of Long Beach.

The terminal gate command center, or ”kitchen” in marine terminal parlance, would be run from a centralized location, and would reduce the number of clerks required at desktop stations, according to DeNike.

“You don’t need clerks in every terminal,” he said.

SSA is also working with the Port of Long Beach to install an electric grid where a container is offloaded from a containership and placed into a dock-side grid network, then shuttled via a network of electric trolleys to a receiving yard, and then onto on-dock rail.
Crane-and-trans-tainer operators would operate that yard equipment from a centralized office, rather than up in a cab.

When pressed on whether the West Coast labor force represented by the ILWU, would embrace these new automated and centralized business models, DeNike said employers on the Coast already won these concessions in the past two labor contract negotiations, especially after the highly contentious agreement signed in 2002.

“Labor needs to be convinced,” DeNike conceded, noting they are concerned over losing jobs, but he said it would be good for both parties over the longer term and that SSA would take the new technology advancements to arbitration if necessary.

“If we can cut the cost $50-$60 per container, we can be competitive,” he said.

In This Issue

Up Front

News, Trends & Analysis
New Items

Transport Economics: Don’t be so gloomy

Capitol Watch: From cargo screening to
roadability equipment

Trade Tools: A different world of trade in 2010

Supply Chain
Chris Steele: The corner and what’s around it

Compliance Corner: Hot trade compliance issues for 2010

Tech Trends: Five trends for 2010

Commentary
David Bennett: Five predictions for 2010

Gateway Glance
Georgia

Vietnam

The Port Community
East Coast Ports 2010: Five things to watch for

West Coast Ports 2010: The future of West Coast port productitivy?

The Shipping Environment: Five sustainable trends for 2010

Product Review: Cranes

Casualties
Triple-deck trailer barge snaps towline, tankers leak,
Coast Guard ice breaker runs aground ... and much more

Final Say
Your supply chain dynamics: 2010 crisis? Or oppotrunities?