Cargo Business Newswire ArchivesSummary for February 9 through February 13, 2015:
Monday, February 9, 2015
Tension escalates in West Coast contract talks as PMA temporarily suspends weekend shifts
Labor contract talks for West Coast ports seem to be going south, as employers and dockworkers continue to slug it out over who is to blame for cargo congestion and retailers demand that PMA and ILWU negotiators get their act together.
On the heels of an ILWU statement Friday urging negotiations to continue and claiming that a deal was "extremely close," the PMA temporarily suspended vessel loading and unloading operations over the weekend. Vessel operations are scheduled to resume Monday, February 9.
"Temporarily suspending port operations is just another example of the International Longshore and Warehouse Union and Pacific Maritime Association shooting themselves in the collective bargaining foot," said Jonathan Gold, vice president for supply chain at the National Retail Federation. "The continuing slowdowns and increasing congestion at West Coast ports are bringing the fears of a port shutdown closer to a reality."
Mixed messages
The PMA said yard, rail and gate operations would continue at terminal operators’ discretion, asserting that the ILWU continues to limit operations by withholding the needed crane operators or operating slowly.
"In light of ongoing union slowdowns up and down the coast which have brought the ports almost to a standstill," reads the statement, "PMA member companies finally have concluded that they will no longer continue to pay workers premium pay for diminished productivity."
"After three months of union slowdowns, it makes no sense to pay extra for less work," said PMA spokesman Wade Gates, "especially if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock."
Just prior to the PMA announcement, the ILWU had issued a statement stating it wanted to keep management at the negotiating table in order to finish an agreement that is "extremely close."
"We’ve dropped almost all of our remaining issues to help get this settled - and the few issues that remain can be easily resolved," said ILWU President Robert McEllrath.
The ILWU promised to keep cargo flowing, despite what it termed as the "massive, employer-caused congestion crisis" that delayed shipping for most of 2014.
These are the latest sallies the skirmish between the ILWU and the Pacific Maritime Association, which have been in talks for seven months to concur on a new contract for up to 20,000 longshore workers at 29 West Coast ports. Both sides have blamed each other for the crippling cargo congestion that has plagued the coast for the past three months.
Enough is enough
Management says the majority of the cargo congestion is due to dockworkers deliberately slowing down work pace at West Coast ports. The union says it is not orchestrating a slowdown, and that the root causes of the backups include a shortage of truck chassis and the advent of mega container ships.
The industry take seems to be that all three – labor slowdowns, chassis shortages and the new logistics of processing mega container ships – are creating a perfect storm of problems that are overwhelming West Coast ports and devastating the supply chain as they stem the flow of trade.
"Enough is enough,v said Gold, in the NRF statement. "The escalating rhetoric, the threats, the dueling press releases and the inability to find common ground between the two sides are simply driving up the cost of products, jeopardizing American jobs and threatening the long term viability of businesses large and small."
Best offer
Last week, the PMA announced its "best offer" to the ILWU, saying that employers would shut down the ports within 5 to 10 days if a deal isn’t reached.
In a Wednesday teleconference, Jim McKenna, PMA president and chief executive officer, outlined the terms of a five-year contract, which included 3 percent annual wage increases. He said the employers’ offer meets the International Longshore and Warehouse Union’s two biggest demands: maintenance of their high-end health benefits and jurisdiction over maintenance and repair of truck chassis.
McKenna also said the union has recently made new demands, insisting on changes to the local arbitration system that would give them the ability to unilaterally remove arbitrators who rule against them.
"We're not considering a lockout," McKenna said on the conference call. "What I'm really saying is that this system will bring it to a stop. Once that happens, we really don't have a choice."
The ILWU said this is the second time in recent memory that the employers have threatened to close ports at the final stages of negotiations. They said the union has not engaged in a port strike over the West Coast longshore contract since 1971.
"Closing the ports at this point would be reckless and irresponsible," said McEllrath.
"Our message to the ILWU and PMA: Stop holding the supply chain community hostage," said NRF’s Gold. "Get back to the negotiating table, work with the federal mediator and agree on a new labor contract."
Capitol Watch: Washington sets out with a bang to find the buck
By Anna Denecke, Associate, Blakey & Agnew, LLC
Congress and the Obama Administration are often accused of sidestepping important issues, and transportation funding is no exception.
In 2008, a specially convened National Surface Transportation Policy and Revenue Study Commission recommended to Congress several mechanisms to increase transportation revenue, including raising fuel taxes. A few years later, the 2010 Simpson-Bowles Plan included a directive to Congress to phase in a gas tax increase of 15 cents per-gallon. Congress declined to take action on either set of recommendations. Then, in 2014, the Administration released a four-year surface transportation bill without providing details on how to pay for it.
Year after year, our nation’s highways, bridges, and roads have suffered from underinvestment as a result of Congressional inaction. Fast forward to early 2015, and we might finally be seeing a light at the end of the (pardon the pun) long and decrepit tunnel.
On Feb. 2, in conjunction with his FY2016 Budget Request, the President released an outline of his new and improved GROW AMERICA Act. The updated bill includes a revenue source – a revamped corporate tax structure – that is similar to a proposal floated by unlikely duo Senators Rand Paul (R-KY) and Barbara Boxer (D-CA). Both plans tax corporations that currently keep their profits overseas.
Under the Obama plan, companies would pay a one-time, 14 percent tax rate to bring their earnings back to the U.S. – but these corporations would face taxes regardless of whether or not they chose to bring back their earnings. Estimates show the Obama proposal would create a $238 billion windfall of revenue, which would be deposited in the Highway Trust Fund, roughly matching the $238 billion expected gas tax revenue over the next six years.
Meanwhile, under the Boxer-Rand Invest in Transportation Act of 2015, companies that bring back overseas earnings over the next five years would subject those earnings to a 6.5 percent tax rate. Like the White House proposal, revenue from the repatriation of offshore profits would be deposited in the Highway Trust Fund to be used for infrastructure projects.
However, the Obama Administration proposal taxes all overseas profits and incentivizes companies to repatriate earnings right away. The Invest in Transportation Act offers a one-time repatriation holiday, which in the past Obama has opposed, saying that it incentivizes companies to keep future profits overseas while lobbying Congress for additional holidays.
The Obama and Rand-Boxer plans differ in structure and tax rate, but there’s room for compromise. A third proposal, introduced by Representative John Delaney (D-MD) and cosponsored by Richard Hannah (R-NY), could bridge the gap between the two repatriation-for-infrastructure-funding plans. The Infrastructure 2.0 Act creates the same framework as the President’s proposal, but sets tax rates for overseas earnings at 8.75 percent. Delaney’s bill patches the Highway Trust Fund hole for six years and creates a commission to study a longer-term revenue source.
Other proposals have been floated in both the House and the Senate that would fund a long-term bill without rewriting the corporate tax code. Representative Earl Blumenauer (D-OR) reintroduced a bill on Feb. 4 that would increase the gas tax by 15 cents over the next three years and index it to inflation. Blumenauer is in bipartisan company. In the last Congress, Sens. Bob Corker (R-TN) and Chris Murphy (D-CT) introduced legislation that would raise federal gas taxes by 12 cents over two years, and index the rate to inflation. Other ideas floated by lawmakers include capturing revenue generated from increased drilling on federal land, and abolishing the gas tax and replacing it with a carbon tax.
Perhaps the biggest indication of where Congress will find transportation revenue comes from its leadership. Powerful Ways and Means Chairman Paul Ryan (R-WI), who will be in charge of finding the funds for the House surface transportation proposal, expressed openness to establishing common ground with Obama over his tax proposal. House Speaker John Boehner (R-OH), meanwhile, indicated he’d be open to tax reform during a press conference in early January, but put the kibosh on a gas tax increase, saying it is "doubtful" that the votes are there. Senate Minority Leader Harry Reid (D-NV) was rumored to be developing a repatriation bill last Congress with Sen. Paul, that would essentially create the same structure as the current Boxer-Paul proposals.
Environment and Public Works Chairman Jim Inhofe (R-OK) and Finance Committee Chairman Orrin Hatch (R-UT) both will play key positions in the Senate during the surface transportation authorization drafting and funding process. They have both expressed tepid willingness to explore a gas tax increase, referring to it as a user fee. However, Senate Majority Leader Mitch McConnell (R-KY) shot down the idea during a 60 Minutes interview. "We know we’re not going to pass a gas tax increase," dismissed McConnell.
For now, the back-and-forth on how to fund a long-term surface transportation bill continues. However, given the recent slate of bills, hearings, and interviews, it’s clear that the issue is on lawmakers’ minds. Should they settle on a revenue generating mechanism in the coming weeks, Washington will need to agree on the details quickly. MAP-21 expires on May 31.
Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, DC.
ILWU: Don’t close ports over a few remaining issues
The ILWU has issued a statement saying it wants to keep management at the negotiating table in order to finish an agreement that is "extremely close."
"We’ve dropped almost all of our remaining issues to help get this settled - and the few issues that remain can be easily resolved," said ILWU President Robert McEllrath.
The ILWU promised to keep cargo flowing, despite what it termed as the "massive, employer-caused congestion crisis" that delayed shipping for most of 2014.
The union statement is the latest sally in a war of words between the ILWU and the Pacific Maritime Association. They have been in talks for seven months to come up with a new contract for up to 20,000 longshore workers at 29 West Coast ports. Both sides have blamed each other for the crippling cargo congestion that has plagued the coast for the past three months.
Management says the majority of the cargo congestion is due to dockworkers deliberately slowing down the work pace at West Coast ports. The union says it is not orchestrating a slowdown, and that the root causes include a shortage of truck chassis and the advent of mega container ships.
This week, the PMA announced its "best offer" to the ILWU, saying that employers would shut down the ports within 5 to 10 days if a deal isn’t reached.
In a Wednesday teleconference, Jim McKenna, PMA president and chief executive officer, outlined the terms of a five-year contract, which included 3 percent annual wage increases. He said the employers’ offer meets the International Longshore and Warehouse Union’s two biggest demands: maintenance of their high-end health benefits and jurisdiction over maintenance and repair of truck chassis.
McKenna also said the union has recently made new demands, insisting on changes to the local arbitration system that would give them the ability to unilaterally remove arbitrators who rule against them.
"We're not considering a lockout," McKenna said on the conference call. "What I'm really saying is that this system will bring it to a stop. Once that happens, we really don't have a choice."
The ILWU said this is the second time in recent memory that the employers have threatened to close ports at the final stages of negotiations. They said the union has not engaged in a port strike over the West Coast longshore contract since 1971.
"Closing the ports at this point would be reckless and irresponsible," said McEllrath.
CMA CGM and Hamburg Süd to expand joint services
The CMA CGM Group and Hamburg Süd are expanding their existing cooperation, according to a CMA CGM statement.
In addition to existing joint services between North Europe and both the East and West coasts of South America, various new initiatives are in the final stages of preparation.
"CMA CGM has signed a major new agreement with a valuable partner," said Rodolphe Saadé, CMA CGM vice chairman. "This partnership reinforces the group’s position in South and North America, reflecting our ambitions in this rapidly growing area and giving us the means to accelerate our development."
Starting in mid-May, pending FMC approval, the lines will start a new pendulum service which will connect Asia, the Caribbean, the U.S. East Coast and North Europe, along with United Arab Shipping Company for the trans-Atlantic side. This new service will complement the one connecting Asia with U.S. East Coast via Suez, the shipping line said.
The French shipping giant also reports that the lines will revamp the services between Asia and both East and West Coast of South America, starting in July 2015.
And since mid-January Hamburg Süd has been taking slots between Asia and the Caribbean on CMA CGM’s PEX 2 service, as well as on the Brazex service, which provides a connection to Manaus from the Caribbean.
Maersk Line adds Port of Boston to TA5 service
Maersk Line started calling at the Port of Boston’s Conley Container Terminal with the arrival of the Sealand Illinois this week, according to the Massachusetts Port Authority.
Boston will be the second U.S. port of call after New York on Maersk’s TA5 service, part of their East-West Network, followed by Baltimore, Norfolk, Savannah, and Charleston. Foreign calls on this service will include Algeciras and Valencia, Spain, Sines in Portugal, and the Italian ports of Gioia Tauro, Naples, Leghorn, La Spezia, and Genoa, the statement said.
Maersk Line joins six other service providers at the port, including Mediterranean Shipping Company, COSCO, K-Line, Yang Ming, Hanjin Shipping, and Evergreen Line.
"Coming back to the Port of Boston with our TA5 service offers customers a dependable, direct service between New England and Mediterranean markets," said Michael White, president of Maersk Line North America. "We will work closely with the Massachusetts Port Authority to make certain shippers have effective resources for optimal supply chain performance."
Port Director Deborah Hadden said Conley Container Terminal has seen steady growth in container volume over the last several years. Container volumes for 2014 were up 10 percent year-over-year for a total of 214,243 TEUs.
The Sealand Illinois is the first of three Maersk Line ships, each with capacity of approximately 6,400 TEUs, scheduled to rotate through Boston. MSC will operate an additional three ships of similar capacity.
Li Ka-shing may sell 40 percent stake in Hutchinson Port Holdings
It is rumored that billionaire Li Ka-shing is considering the sale of a portion of the port operations held by Hutchison Whampoa to a consortium of state-owned firms, while increasing efforts to acquire European assets.
Hutchison and four mainland companies had been in talks since mid-2014 over a 40 percent stake in Hutchison Port Holdings valued up to $20 billion, according to an inside source. The companies include China Merchants Holdings (International), Cosco Pacific, China Shipping Terminal Development and State Development & Investment Corp.
The negotiations lost steam recently once Li revealed the restructuring of Cheung Kong (Holdings) and Hutchison last month in a move that led to his conglomerate registering in the Cayman Islands. That move sparked worries that that he was divesting out of Hong Kong and the mainland.
"There is nothing at this moment that we should report to the market. If and when there is any transaction which requires an announcement according to the Hong Kong listing rules, we will duly comply," China Merchants said in a statement.
The prospective agreement also hit a snag when buyers regarded Li's asking price as "excessively overvalued," according to the source. "It is like a replay of the ParknShop [deal]. The buyers would only end up massively overpaying for assets with no essential upside and no managerial control," the source said.
When contacted by the South China Morning Post about the prospective deal, Hutchison said: "The market rumor is unfounded."
Hutchison holds an 80 per cent stake in HPH, the world's largest container port operator by throughput with a foothold in 52 ports in 26 countries.
For more of the South China Morning Post story: www.scmp.com
Tuesday, February 10, 2015
Port of Portland prepares for potential strike/lockout as dockworkers decline to work Monday and Friday
Photo credit: Mark Graves/The Oregonian
As Port of Portland officials plan how to handle a lockout of or strike by longshore workers at the port, Portland longshore workers declined to work on Friday or Monday due to grievances over terminal actions, and employers temporarily suspended weekend dockworker shifts at 29 West Coast ports.
By the end of day Monday, Portland’s Terminal 6 will have been effectively closed for business for four days.
A shutdown would be particularly costly in the Portland area, where approximately one-fifth of the region's economy is generated by exports, according to a 2012 study by the Brookings Institution.
On Friday, the Hanjin Copenhagen container ship sat at Portland's Terminal, but longshore workers were not loading or unloading cargo from the vessel. The union local informed ICTSI Oregon, which operates Terminal 6, it wouldn't work Friday or Monday because it was demonstrating a grievance over several recent incidents at the terminal, according to an ICTSI spokesman. He said the notification came a little more than an hour before the workers' shift was scheduled to start.
"The ILWU again utilized the incidents of January 29, January 30 and February 2, 2015, when its members were released due to woefully low productivity, as the excuse for engaging in the current work stoppage," said ICTSI Oregon chief executive Elvis Ganda in a statement.
Terminal employers on the West Coast temporarily canceled weekend dockworker shifts on Friday, according to a statement from the Pacific Maritime Association.
According to Josh Thomas, a spokesman for the Port of Portland, some port tenants don't use dockworker labor and aren't involved in the West Coast port contract negotiations, port security officials are discussing how to operate and staff "neutral gates" where these tenants could enter and exit their facilities.
Thomas said the port's security force is prepared to work with the Portland Police Bureau to oversee activities at the neutral and contested gates.
The Harbor Trucking Association announced Friday that more than 70 trucking firms are declaring a "force majeure," a legal term used when outside forces makes it difficult to fulfill a contract — in this case, referring to the unparalleled congestion at the ports of Los Angeles and Long Beach.
As of Friday, 18 container ships were anchored off the twin ports, awaiting their turn to be unloaded, according to the Marine Exchange of Southern California.
"It’s the biggest issue facing our members at this time," said Weston LaBar, executive director of the Harbor Trucking Association. "Motor carriers are being charged hefty bills because yards are too congested to take (containers) back."
The association, which represents over 65 percent of trucking companies that work the ports in Southern California, says the firms are protecting themselves from growing fees charged by shipping lines during the cargo congestion crisis. Drayage firms say they have paid hundreds of thousands of dollars in fees over the past few months for not returning an empty container or not being able to pick up a loaded container, something they say is beyond their control.
Trucking companies can be charged $85 to $175 a day for storing the equipment and $100 to $225 a day in late fees.
The terminal yards have been clogged with cargo caused by processing higher volumes from mega container ships and by the uneven availability of chassis to haul the goods away — which means terminals often cannot accept containers or return them before penalties are accrued.
The Harbor Trucking Association will also demand that a Motor Carrier Bill of Rights be added to the Uniform Intermodal Interchange and Facilities Access Agreement, a contract that outlines guidelines and rules for exchanging equipment among ocean carriers, railroads, leasing companies and intermodal trucking companies.
Asia trade threatened by inadequate global port infrastructure
Asian trade growth is being endangered by inadequate port capacity and productivity, which are chronic problems not only at U.S. ports, but also increasingly around the world. Industry experts say gridlock at the ports of Hong Kong, Shanghai, Qingdao, Manila and Rotterdam threatens Asia’s thriving intra-regional trade.
"In my 25 years' experience in shipping, 2014 was the worst I've seen in terminal congestion in Asia," said Tim Wickmann, chief executive of MCC Transport, the intra-Asia container shipping arm of AP Moller-Maersk Group. "Congestion in Manila and Hong Kong was a huge problem for us."
Ports are trying to keep up with container carriers, which are introducing newer and larger vessels. Wickmann guessed trade growth would create three million extra handling moves for Asian terminals.
"However, we have a situation where many ports in Asia are close to their maximum capacity and are not developing fast enough to cater for this growth," Wickmann said. "Inadequate port capacity and related infrastructure is the single biggest challenge to intra-Asia trade growth."
"Many (port) terminals have enjoyed captive markets and high returns on investments for many years," said Andy Lane, a partner at Container Transport International Consultancy. "As such, they have not felt compelled to focus on creating competitive advantages, which is likely the primary reason why productivity has lagged. The environment is changing. We now see different ports competing for the same hinterlands, and multiple terminals within ports."
Others blame shipping lines for their obsession with bigger and bigger ships, putting pressure on ports that have little to gain from more capital investment.
"The short-term impacts of large ships on terminal productivity and supply chains have often been adverse," said Jonathan Beard, a vice-president at US consultancy ICF International. "Our analysis of container exchanges per port call for large ships does not indicate a significant increase over the past two years, yet the larger vessels demand greater investment in terminal infrastructure and equipment."
"Until the economies of scale start coming through, the potential benefits of these larger vessels will not be fully realized - the terminals will suffer the additional investment cost without the upside."
For more of the South China Morning Post story: www.scmp.com
Japan’s carmakers pay millions in extra shipping costs on port backups
Japanese carmakers are being forced to ship some car parts to U.S. factories via pricey air cargo and alter production processes as the labor dispute at U.S. West Coast ports rages on and cargo backlogs continue.
Subaru, the fastest-growing brand in the U.S., said that it has had to shell out an extra $60 million in costs a month due to air freight, which has seen prices go up with the extra demand.
"It looked like the labor talks were going well at one point but in recent days the slowdown has grown quite severe," said Mitsuru Takahashi, financial officer at Fuji Heavy Industries, Subaru’s parent company.
He said that without chartering cargo flights, the Subaru's U.S. production would have stopped in mid-February.
Honda Motor Company and Nissan Motor Company said they had shifted to air shipments for select components, from late-January and December, respectively.
A Hyundai Motors spokesman said the company uses East Coast ports more than West Coast ones to supply its factory in Alabama, and was seeing no impact on production up to now since it had added and diversified shipping routes.
Three injured crewmembers from a cargo ship off the north Oregon coast were rescued Thursday by a Coast Guard helicopter that took them to Astoria for medical treatment.
The crewmembers’ injuries, inflicted while refueling and cleaning the ship’s holds, included apparent chemical burns and one man had a possible broken bone, according to Petty Officer 3rd Class Amanda Norcross.
The 623-foot ship Almasi requested help Thursday afternoon in high seas.
PMA says ILWU wants both sides to have the right to veto local arbitrators
The Pacific Maritime Association issued a statement Monday that revealed more details of West Coast port contract talks, in a move likely designed to put pressure on the International Longshore and Warehouse Union to accept the proffered deal for dockworkers at 29 West Coast ports.
The PMA said the union wants the right to fire the arbitrators who typically step in if there is a dispute after a contract is agreed upon.
Four arbitrators act as independent third parties in disputes between port operators and local unions. When a contract is in place, and a disagreement occurs, the two sides meet with an arbitrator and lay out their respective cases, and both sides must accept the arbitrator’s decision.
Usually, the mediators can only be removed by mutual consent of both parties. PMA officials say the union wants to change the rule so that one party can veto an arbitrator.
"The ILWU is essentially seeking the right to fire judges who rule against them," said PMA spokesman Wade Gates. "The waterfront arbitration system is an essential check-and-balance against illegal labor actions. It would be reckless to allow a single party to change the rules as the union desires."
Craig Merrilees of the ILWU called the association's assertion "totally inaccurate."
"It is irresponsible for them to make these kind of misleading statements," Merrilees said.
Reuters reports that once a settlement is reached, it will take six to eight weeks to clear out the immediate backlog at the ports of Los Angeles and Long Beach, and possibly a few months more to restore freight traffic to normal, port representatives said.
West Coast contract talks are scheduled to resume on Wednesday, according to Reuters.
Ag exports suffer severely from clogged West Coast ports
Cargo backups, worsened by tense contract negotiations between the ILWU and the PMA, have resulted in clogged ports that are crippling U.S. exporters of agriculture and forest products, according to the Agriculture Transport Coalition.
Chris Christopher, a transportation analyst with IHS Insight, told USA Today that shipping times through some ports have doubled and even tripled. Chinese New Year is next Thursday, but a large share of U.S. produce export shipments intended for Asia won’t get there in time.
The losses are in the billions, according to the coalition, and have triggered industry job loss and put family farms and businesses in jeopardy.
On Feb. 9, California Senators Feinstein and Boxer sent a letter to the ILWU and PMA emphasizing the urgent need to find a solution and get the ports operating again, the statement said. The Senate Commerce, Science and Transportation Committee is slotted to conduct a hearing on the issue this week.
The AgTC says permanent damage is being done to agriculture exporters. Foreign customers, unable to get the U.S. food and farm products they need, are turning elsewhere to acquire hay, pork, beef, citrus, Christmas trees, apples, cotton, rice and almonds usually sourced from the U.S.
"As we unfortunately learned when the West Coast ports shut down in 2002," the statement said, "those customers, once gone, do not necessarily come back. There is nothing that we produce in this country in agriculture and forest products, that cannot be sourced somewhere else in the world. We can grow the best in the world, but if we can't deliver affordably and dependably, the customer will go somewhere else... and may never come back."
Containerized agriculture exports from West Coast ports are now running at less than 50 percent of the normal volumes, according to AgTC. The port backups have reduced U.S. agriculture exports by $1.75 billion each month.
In January alone, cherry growers in Oregon lost over $250,000 of export sales directly related to port disruption. If not resolved, it will lead to a sales loss of $5 million in 2015.
The American Meat Institute and the National Pork Producers Council report losses of $40 million in exports each a week. Shipping delays have made it impossible to ship chilled beef or pork to Asia.
The AgTC's membership includes companies that represent all agriculture products and many forest products exported from the U.S.
Costco and other Hawaiian retailers prepare for lockout
Costco and other retailers in Hawaii are stocking up in preparation for a potential port lockout that could happen within a week due to the West Coast labor dispute.
If the ongoing dispute between the Pacific Maritime Association and the International Longshore and Warehouse Union results in a lockout at West Coast ports, it could stop all cargo movements to the Islands.
Scott Ankrom, general manager of Costco Iwilei, said last week that the store is taking actions to ensure Hawaii stores receive products.
"Our buying office is doing everything they can," he said. "We do have supplies on hand. The buying office is adjusting our safety stock in California to help assist with the possibility of a port lockout."
A coast-wide lockout would affect Hawaii, Guam, Alaska and American Samoa. Honolulu’s Matson shipping line says currently cargo is still flowing to the Islands.
According to Pacific Business News, Hawaii's congressional delegation is considering making a request for an exemption if a lockout happens. During a work lockout in 2002, Hawaii was given an exemption by the Pacific Maritime Association to receive maritime shipments after a lockout that lasted about a week.
The delegation said at that time Hawaii needed the exemption due to its isolated location and dependence on shipping for nearly all of its goods.
Georgia Senate passes bill to allow port authority to accept federal funds
The Georgia Senate agreed Tuesday to alter legal language related to the Georgia Ports Authority’s ability to accept federal funds, so that DOT funding can be used to help deepen the Port of Savannah’s harbor.
The Army Corp of Engineers requested the changes in the state law. Earlier this month, the Obama administration pledged $42 million over two years to the project.
The state expects the federal government’s share of the $706 million project to be $440 million. Deepening the Savannah River from 42 feet to 47 feet will allow larger container ships to call after the Panama Canal expansion project is completed in late 2015.
The state bill will now go to the House for consideration.
For more of the Atlanta Journal Constitution story: www.ajc.com
Ecuador declares state of emergency over ship stuck in Galapagos
Ecuador announced a state of emergency in the Galapagos Islands one week after the cargo ship Floreana, loaded with hazardous materials, ran aground there.
The Floreana was ferrying food and other supplies to the Galapagos, as well as 10,000 gallons of fuel.
Booms have been used to contain a fuel spill in the pristine waters of the islands, which are famous for their unique flora and fauna.
The emergency "will allow authorities to have immediate [financial] means to deal with the situation," according to a Galapagos National Park spokesman.
Hanjin Shipping officially terminated its services at the Port of Portland Tuesday, according to port operator ICTSI Oregon and port officials.
According to the Port of Portland, that business generated $83 million annually.
The South Korean container line sent its customers a long-range schedule Tuesday that indicated the March 4 Hanjin Brussels will be its last ship to call Portland. Later in the day, Hanjin sent a letter to the shipping companies it works with, saying Portland had been dropped. According to the letter, the Port of Portland would only be serviced by truck and rail via the Seattle port.
Hanjin ships account for 78 percent of the business at Terminal 6, moving 1,600 TEUs per-week. Hanjin services have been transporting most Oregon agricultural exports to Asia, and have hauled apparel for Pacific Northwest-based companies like Nike and Columbia Sportswear in and out of the U.S.
The shipping company has not yet provided specific reasons for its withdrawal from the Port of Portland, but it’s not a leap to assume that cargo backups and two years of hostile labor disputes between ICTSI Oregon and local ILWU dockworkers have played a big role.
Hanjin’s most recent ship sat for four days waiting to be unloaded as dockworkers stopped working Friday and Monday to protest their grievance with ICTSI, and the port operator canceled work on Saturday and Sunday, saying the workers weren't productive enough to justify the shifts.
IANA: Intermodal sector growth up nearly 5 percent in 2014
Significant midyear gains, paired with comprehensive growth in the fourth quarter, delivered a strong overall intermodal performance in 2014, according to the Intermodal Association of North America’s year-end Intermodal Market Trends & Statistics publication.
Intermodal volume improved 4.8 percent in 2014, reports IANA. Domestic containers led the charge and global intermodal experienced significant growth compared to 2013.
"Intermodal performed well, despite industry-wide challenges," said Joni Casey, president and CEO of IANA. "For the first time in four years, international, domestic container, and trailer market segments all posted year-over-year growth. And volume gains were widespread geographically, with eight out of nine regions recording increases during 2014."
Domestic containers grew 5.7 percent year-over-year, according to the statement. International almost doubled its growth pace of the last three years, reporting a 4.4 percent increase in 2014, placing international loadings at just 4 percent below pre-recession levels. Trailer volumes grew by 2.9 percent year-over-year.
Intermodal marketing companies reported solid intermodal revenue growth in Q4, according to IANA, with average revenue for intermodal loads up by 3.6 percent. IMC intermodal also reported a 1.5 percent gain in volumes over Q3 2014 levels, which could indicate that this segment is rebounding.
U.S. claims China export subsidy program is illegal
On Wednesday, the U.S. challenged a Chinese export subsidy program for products including textiles, medical products and agriculture, claiming the support was illegal under international trade law.
"This policy appears to break the rules that China committed to uphold when they joined the WTO, and it's a policy that injures American workers, farmers, ranchers, and businesses – really anyone who plays by the rules and wants to compete fairly on the merits of their hard work, and the quality of their products," said U.S. Trade Representative Michael Froman in a statement.
Froman said starting a dispute process at the World Trade Organization would help ensure a level playing field. There are already 24 disputes before the WTO involving the U.S. and China, 15 of them brought by the U.S.
China's "Demonstration Bases-Common Service Platform" program seemed to provide forbidden export subsidies, providing free and discounted services, cash grants and other incentives to industries such as textiles, apparel and footwear, advanced materials and metals, light industry, specialty chemicals, medical products, hardware and building materials, and agriculture, according to the office of the United States Trade Representative (USTR).
Volkswagen chooses JaxPort as its Southeast import hub
JaxPort will soon be handling imports of Volkswagens and Audis, according to Florida Gov. Rick Scott.
Scott and officials from the Volkswagen Group said the company is making JaxPort its Southeastern U.S. port and will start importing cars through the Jacksonville port on May 5.
Approximately 100,000 Volkswagen, Audi and Bentley vehicles are expected to be imported in the next year and 550,000 over the next five years.
Jacksonville won Volkswagen’s business over ports in Baltimore, Brunswick, Ga., Houston and Tampa, according to the Tampa Bay Times.
After a Cyprus-flagged cargo ship ran aground off Andros Island on Wednesday, a rescue operation was launched to evacuate the 22 sailors, according to the Greek Coast Guard.
So far, 18 crewmen of the Good Faith have been transferred to safety by rescue teams aided by three tugboats and two helicopters, report local authorities.
Gale force winds on the Aegean Sea led the empty freighter to run aground.
Breaking News: West Coast port operators shut down ship operations for four days
The Pacific Maritime Association, representing port employers, suspended ship unloading for four days during the holidays — a time when dockworkers are entitled to overtime pay — reporting that management did not want to pay the premium rate during worker slowdowns.
PMA and the ILWU negotiators, who had been scheduled for a full session on Thursday along with the federal mediator, met briefly in San Francisco before recessing, according to Steve Getzug, spokesman for the PMA. The two parties have conducted nine months of contentious talks in order to agree on the terms of a new contract for up to 20,000 dockworkers at 29 West Coast ports. The previous six-year contract expired on July 1, 2014.
"The continued intransigence by labor and management to reach a new contract is unacceptable," said Jonathan Gold, vice president of supply chain for the National Retail Foundation. "Retailers and the rest of the supply chain are frustrated beyond belief."
The four days affected by the suspension of vessel operations include Thursday, 2/12 (yesterday - Lincoln's Birthday); and Saturday, 2/14 through Monday, 2/16 (Washington's Birthday).
"In light of ongoing and costly ILWU slowdowns," the PMA statement said, "PMA members will temporarily suspend premium-pay weekend and holiday vessel operations on four upcoming dates, while yard, gate and rail operations will continue at terminal operators' discretion. In Southern California, terminal operators will expand daytime vessel operations on non-holiday weekdays.
"PMA members have concluded that they will not conduct vessel operations on those dates, paying full shifts of ILWU workers such high rates for severely diminished productivity while the backlog of cargo at West Coast ports grows."
The International Longshore and Warehouse Union issued a statement in response to the PMA suspension, noting the action marks the second time in less than a week that employers have idled vessels.
According to the PMA, the current point of contention in West Coast longshore worker contract talks is a union demand that both sides have the ability to unilaterally remove local arbitrators once a labor contract has been agreed upon.
Those arbitrators settle disputes on the docks, when a contract is in place. Currently, both sides must agree to remove an arbitrator.
"Last week, PMA made a comprehensive contract offer designed to bring these talks to conclusion," said PMA spokesman Wade Gates. "The ILWU responded with demands they knew we could not meet and continued slowdowns that will soon bring West Coast ports to gridlock."
The union said PMA has mischaracterized the ILWU's bargaining position, but did not elaborate.
"This is an effort by the employers to put economic pressure on our members and to gain leverage in contract talks," said ILWU President Robert McEllrath in the statement. "The union is standing by ready to negotiate, as we have been for the past several days."
In a video trending on social media, McEllrath addresses the ILWU membership, encouraging rank and file union dockworkers to "ignore PMA's bullshit" and continue to support ILWU contract negotiators.
"The slowdowns need to end," said NRF's Gold. "The brinkmanship needs to stop. The ILWU and PMA are delaying cargo and merchandise in the short-term while harming the competitiveness of the West Coast ports in the long-term. This stalemate is hurting American businesses, their employees and consumers."
Check out this LAist piece that features stunning aerial photos of the cargo traffic jam off L.A./Long Beach: laist.com
Labor contract talks for West Coast ports seem to be going south, as employers and dockworkers continue to slug it out over who is to blame for cargo congestion and retailers demand that PMA and ILWU negotiators get their act together.
By Anna Denecke, Associate, Blakey & Agnew, LLC
Photo credit: Mark Graves/The Oregonian
The Pacific Maritime Association issued a statement Monday that revealed more details of West Coast port contract talks, in a move likely designed to put pressure on the International Longshore and Warehouse Union to accept the proffered deal for dockworkers at 29 West Coast ports.
Hanjin Shipping officially terminated its services at the Port of Portland Tuesday, according to port operator ICTSI Oregon and port officials.
