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NYK terminates lease for Tacoma terminal project; will call at APMT
Japan’s biggest shipping line, NYK, has altered its business plan at the Port of Tacoma in the wake of the global container-shipping crisis by terminating its lease agreement with the Puget Sound port authority for a proposed 168-acre marine terminal there.

Under a revised agreement, it was announced that NYK would call at the Tacoma facility run by APM Terminals, by 2012 and extending for 25 years. The APM terminal there no longer services its sister company, Maersk, which bolted for the Port of Seattle this past spring.
The new plan creates a business partnership between APMT and Yusen Terminal Tacoma, Inc. (YTTI).

“These new agreements with APMT and the Port of Tacoma, NYK and YTTI offer us the best long-term site to house our YTTI business, and to grow our NYK business in the Pacific Northwest,” said Peter Keller, executive vice president and chief operating officer, NYK Group Americas, Inc.

In 2008, NYK handled an estimated 132,000 TEUs through the Port of Seattle.

“In a market with sufficient existing terminal capacity to serve our customers’ growth plans in the medium term, this is an important step to balance supply and demand, said Tim Farrell, the port’s executive director. “It still leaves the Port of Tacoma with room for substantial growth in the longer term,” he said.

Waterfront employer group fires back at ILA
East and Gulf Coast shipping management’s proposal to extend the current International Longshoremen’s Association, AFL-CIO (ILA) Master Contract to September 2012 did not succeed. Some 200 ILA wage-scale delegates unanimously rejected the proposal before it could be presented to the 18,500-person union membership, according to the group representing the waterfront employers the United States Maritime Alliance (USMX).

The USMX responded in a statement, referring to a projected container shipping industry loss of $20 billion in 2009 and U.S. unemployment hovering at or near 10 percent.

“The USMX offer would have resulted in significant salary increases for most workers,” the employer group said.

The ILA’s Wage Scale Committee unanimously rejected the proposal at its meeting in Orlando, Florida two weeks ago.

The ILA said in a statement on September 3, “USMX insisted on retaining its right to introduce new technology during the period of the extension, which ILA Wage Scale delegates felt was too important to ignore. They also shared concern over giving back a scheduled wage increase, which will now take place on October 1, 2010.” The USMX proposal would have eliminated the container royalty CAP.

“Eliminating the CAP could make an additional $50 million in supplemental cash benefits available for use by the ILA each year. The proposal also introduced a process to bridge the salary gap between lower-and higher-paid personnel,” the USMX said in a statement.

“The ability to introduce technology enhances the flow of cargo and facilitates productivity increases that are necessary to enable management to pay for improved wages and benefits,” USMX Chairman and CEO James A. Capo said.

“The ILA is completely overlooking the financial gains each and every member will enjoy, in order to veto any implementation of new technology,” said Capo.

The USMX said the contract extension would have provided for a starting rate and salary increase to $20 per hour for anyone earning less than that amount. Twelve percent of ILA labor would receive up to a $4 an hour increase as of October 1, 2009, according to the USMX.

Capo said the wage increases originally due on October 1, 2009, would be deferred until October 1, 2010, at which time all levels would receive a raise.

However, the introduction of new technologies to the East and Gulf Coast working waterfronts under ILA jurisdiction is that union’s primary bone of contention amid concerns over job losses.

“USMX and its members will never give up their right to introduce new technology. It goes against all logic. The employees who may or may not be displaced by technology are well-protected under provisions of the master contract,” Capo said.

“It is unfortunate that the ILA rank and file did not get the opportunity to study the facts of the management proposal before the Wage Scale Committee voted it down. We all ultimately have the same goal—to create a strong maritime industry that can support a well-paid, well-trained labor force,” Capo said.

The ILA rejection of the new proposed contract terms means the current contract remains in effect for the next 12 months.

SSA wants to further automate, centralize ops on West Coast
Everyone wants everything but no one wants to pay for it, said Ed DeNike, the president of Seattle-based terminal operator SSA Containers, at Cargo Business News’ fourth annual Port Productivity Conference in Long Beach, Calif. in early October.

“We feel the only way we’ll survive is to cut costs,” such as through technology applications like automation, DeNike said.

SSA looked at productivity opportunities including dual-hoist 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 off-loaded 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.

Hanjin splits in two
South Korea’s Hanjin announced it would split into two companies, with Hanjin Shipping Holdings set up to manage its subsidiaries, while Hanjin Shipping retains complete control of the shipping business.

The company said in a statement that its “container and bulk shipping businesses continue to show growth, however, it felt the need to implement an advanced corporate governance system that will enable the company to cope with the rapidly changing business environment and secure its future-oriented corporate structure for sustainable growth.”

Hanjin said the transformation into a holding company is also expected to allow its subsidiaries to focus on the core business through an independent and optimized strategy and distribution of its business resources.

The company said shares in Hanjin Shipping Holdings and Hanjin Shipping would be distributed to shareholders according to the ratio of net assets of each company, i.e., 0.1616362 share of Hanjin Shipping Holdings and 0.8383638 share of new Hanjin Shipping for each share of the former Hanjin Shipping.

In This Issue

Up Front

News, Trends & Analysis
New Items

U.S. employment environment promotes import uncertainty

Supply Chain
How are you planning for the rebound?

Trade compliance often has a broader scope

Features
Optimism characterizes inaugural Southeast Freight Conference

Gateway at a glance: Northern California

Ports & infrastructure
Prince Rupert looks towards Memphis

Canada tries to standardize port performance metrics

Global players jockey over Arctic shipping routes

Port Products
Terminal management systems

Commentary
Roll up your sleeves for the next phase

On the Horizon
The Internet of 2020

Casualties