Some truck drivers who haul cargo at the ports of Los Angeles and Long Beach walked off the job Thursday, organizers said, in a protest against two trucking firms they accuse of wage theft.
Port officials said the movement of cargo continued as of Nov. 13, meaning dockworkers did not join the truckers in the walk out.
The truckers were protesting that the trucking companies they work for are improperly classifying them as independent contractors, which means they receive fewer workplace protections and lower pay than if they were company employees.
Drivers from two harbor-area firms, Total Transportation Services Inc. and Pacific 9 Transportation, went back on strike on Nov. 13, alleging that the companies have retaliated against them.
Los Angeles Mayor Eric Garcetti said the truckers with Green Fleet Systems and Total Transportation Services agreed to a cooling-off period. The mayor’s agreement evidently involves about 200 drivers with those two transportation companies, but not Pacific 9 Transportation drivers.
"Making sure nothing stands in the way of goods flowing through the Port of Los Angeles is a top priority of my administration," Garcetti said in a statement.
Drivers set up picket lines truck yards in Compton and Carson and planned to picket terminals if company trucks entered those locations, said Barb Maynard, a spokeswoman for the Teamsters Union, which is backing the drivers.
Green Fleet Systems, which was targeted along with the other two harbor trucking firms in the July strike, is engaged in "productive discussions" with the Teamsters Union, so Green Fleet truckers reportedly stayed on the job.
Alex Cherin, a spokesman for the trucking companies, said the firms had no comment on Thursday's protests.
The walk out occurred during rising tension between the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents employers, who are negotiating a new contract for 20,000 workers on the West Coast whose contract expired July 1.
So far, dockworkers have not joined the strike, although tension between dockworkers and terminal operator employers has grown since July. Both sides threw public accusations at each other last week, raising concerns that a lockout or strike could halt trade at ports up and down the West Coast.
Alex Cherin, a spokesman for the trucking companies, said the firms had no comment on Thursday's protests.
Maersk looks at buying more E-Class container ships
Shiping giant Maersk Line will probably buy more Triple-E vessels as part of its planned multimillion-dollar ship orders over the next six months, according to Soren Skou, the company’s chief executive.
"Over the next three years, the bulk of the capacity we will be buying is going to be big ships that may include Triple-E size," Skou told The Wall Street Journal in an interview.
The company, which reported a 23.5 percent year-over-year increase in its third-quarter net profit to $685 million, said it would place its orders within the next six months—its first for newbuilds since 2011.
Despite industry overcapacity, Skou said demand for shipping will grow 4 to 5 percent in the next few years. He said ships like the Triple-E, which can carry in more than 18,000 TEUs, saves the company around 25 percent of the cost of moving a container from Asia to Europe compared with smaller vessels in Maersk’s fleet, if the ships sail fully loaded.
Maersk Line ordered 20 Triple-E ships in 2011 at a cost of around $185 million each.
"With 4 percent growth in demand for global shipping, we need 108,000 containers in new capacity a year to stay competitive," Skou said.
Skou said the Triple-Es fit well in the alliance that Maersk Line announced in July with MSC, 2M, which recently received the green light from global regulators. The partners will control a 35 percent market share in the Asia-Europe trades, and 15 percent and 37 percent, respectively, of the cargo on trans-Pacific and trans-Atlantic routes.
People familiar with the matter said MSC would also likely charter five Triple-E’s on long-term leases from Scorpio Group, based in New York and Monaco, and China’s Bank of Communications Co.
"Five years from now, it won’t be possible to be competitive with a 9,000-, 10,000-container ship in the Asia-Europe trade loop," Skou said.
Hamburg Süd deploys new Europe-Mexico service at Eurogate
Hamburg Süd awarded the contract for handling its new EMCS Europe-Mexico/ Caribbean Service to EUROGATE Container Terminal in Hamburg, Germany, according to a statement from the terminal operator.
"A reliable transport chain is of the utmost importance to us in ensuring our customers receive their goods speedily and punctually," said Uwe Gaede, general manager of marketing and sales for Central Europe at Hamburg Süd. "EUROGATE Container Terminal Hamburg is known for its high productivity levels and hinterland connections."
The first ship will berth at the terminal on November 13. The regular service connects Northern Europe with Central America and is scheduled to call at Hamburg on a weekly basis.
Hamburg Süd is operating the service with six 2,500-TEU container ships, according to EUROGATE, and will call at eight ports along the route. The round trip from Marin/Pontevedra (Spain) via Antwerp, London and Hamburg to Altamira, Veracruz, Puerto Limon, Cartagena (Colombia) and back will take 42 days.
Washington bumper apple crop endangered by West Coast port delays
Labor slowdowns and congestion at major West Coast ports have slowed the export of a record crop of Washington apples and threatened Christmas season shipments of the fruit to Central American countries.
Washington grows the most apples in the U.S. this year’s crop is 35 percent bigger than usual—yielding about 155 million, 40-pound boxes.
"With the record apple crop we are having this year, the need to move Washington apples outside of the United States is even greater," said Rebecca Lyons, international marketing director for the Washington Apple Commission.
Delays have also hit shipments of autos, smartphones and numerous other products as longshoremen and shippers try to hammer out a new contract involving work at 29 West Coast ports.
"In some markets, like Central America, 50 percent of our shipments occur before Christmas," Lyons said. "Once you miss that Christmas window, it's very difficult to catch up again."
Apples would have to leave port by the end of November to reach Central American countries, clear customs and get to stores in time for the holiday, Lyons said.
The timing has been complex as the Pacific Maritime Association, which represents shipping lines, has accused the International Longshore and Warehouse Union of deliberately slowing work at West Coast ports to gain an edge in contract talks, which the union denies.
The PMA also accused union crane operators in Washington state of moving cargo at half-speed.
The union countered that its members are simply working safely, and it blames a lack of hiring and a shortage of equipment for the delays. Spokesman Craig Merrilees of the ILWU admitted that some members might be slowing down because they’re frustrated about drawn-out contract negotiations, but said the slowdown was not sanctioned by the union.
Zim shipping suspends operations at the Port of Long Beach
Zim Integrated Shipping Services, Israel’s biggest container carrier, has temporarily suspended operations at the Port of Long Beach, according to an employee in Zim’s Long Beach office.
Though the company has not provided a reason, the decision comes after protests in Long Beach and Oakland by the pro-Palestinian protest group, Block the Boat, which organized during this summer’s war in Gaza. The protesters have repeatedly made it difficult for Zim to unload its cargo at the ports of Long Beach and Oakland during scheduled unloading days over the past three months.
A Zim employee in Long Beach said that the suspension is "not a long-term thing." He did not say whether it was the protests that prompted Zim’s decision.
Art Wong, a spokesman for the Port of Long Beach, confirmed that Zim suspended operations at the port, but added that he was not given a reason.
L.A.-Long Beach port trucker strike targets 3 more firms
Striking truck drivers at the Ports of Los Angeles and Long Beach added three more companies to the list of firms they accuse of wage theft.
Truckers from QTS, LACA Express and WinWin Logistics joined the ongoing strike Monday morning, according to Barb Maynard, a spokeswoman for the Teamsters Union, which is backing the drivers.
As in the labor actions against other truck companies, the drivers say they are improperly classified as independent contractors, which means they receive fewer workplace protections and lower pay.
The newly targeted firms could not be reached for comment.
On Thursday, drivers from two other companies—Total Transportation Services and Pacific 9 Transportation—walked off the job and set up picketed at company yards. Although they are still on strike, in a truce brokered by Los Angeles Mayor Eric Garcetti on Friday, they agreed not to picket TTS and P9T since they are in talks to resolve the situation.
Contract talks for West Coast longshoremen between the International Longshore and Warehouse Union and the Pacific Maritime Association have intensified after cargo movement began to slowdown at the end of the holiday shipping season.
Negotiators met the weekend before Veteran’s Day, on Veteran’s Day itself, and into the night on Nov. 12, according to ILWU spokesman Craig Merrilees, who said that kind of schedule is rare.
Since the dockworkers have been working without a contract since July 1, crews have slowed container handling by half in Seattle and Tacoma, walked out mid-shift in Oakland and been unavailable to run cranes in Los Angeles and Long Beach, according to PMA spokesman Wade Gates.
"They’re actually bargaining and making progress," said Jim Tessier, a former official of the maritime association who now works as a labor consultant. "They both lose in a strike or a lockout, and they know it."
The two sides have been in contract talks since May, with no public rancor, but that stopped on Oct. 31 when slowdowns started at the ports of Seattle and Tacoma.
The PMA released a statement accusing workers of reneging on an agreement not to undermine productivity at the ports, while the union said that was a "bald-faced lie," since there was no such agreement.
The job slowdowns and expressions of indignation actually may indicate that the two parties are closing in on an agreement rather than a breakdown in talks, said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California at Santa Barbara.
"These disruptions are designed to get a contract," he said. "The union has been a good egg here, letting it go on beyond the deadline, and there’s been no incentive for the PMA to sign a contract."
Taiwan’s Evergreen container shipping line is dropping Los Angeles and Oakland port calls from its westbound U.S. East Coast-to-North Asia service because of berthing delays and congestion.
"These changes are necessary to preserve schedule integrity," Evergreen said in a statement to customers.
The last westbound NUE vessel calling at Los Angeles and Oakland will be the Ever Dainty, with an estimated time of arrival in Los Angeles on December 14th, and Oakland on December 16th. The Ever Dynamic and Ever Laguna will omit Los Angeles and Oakland calls from their westbound NUE port rotations.
The port rotation for the westbound NUE service has until now been: Charleston, South Carolina; Baltimore; Norfolk, Virginia; New York; Colon, Panama; Panama Canal; Los Angeles; Oakland; Tokyo; Kaohsiung, Taiwan; Hong Kong; Yantian, Ningbo and Shanghai, China. The service will now omit its Los Angeles and Oakland port calls.
Some container lines adding congestion surcharge at West Coast ports
Starting Monday, some shipping companies added a surcharge to container rates to make up for increased costs associated with congestion at West Coast ports — which has worsened in the last two weeks due to worker slowdowns.
The new port congestion surcharges will reportedly range from $1,000 per-FEU through Hanjin Shipping and other lines on the Asia-to-U.S. West Coast trades from Nov. 17, and to $240 to $375 for exported containers through Evergreen Line and Hyundai Merchant Marine.
Blaine Calaway, vice president of sales at Calaway Trading, ships grains, forages and hay products through the Seattle and Tacoma ports destined for Asia as animal feed.
When he received multiple emails Friday from shipping companies announcing the surcharges, he said the impact of the slowdowns became even clearer to him.
He said import loads into the terminals from overseas can reach costs of about $1,500 per container.
"Then tack on $1,000," Calaway said, "that is cost to the consumers."
L.A. port truckers expand picketing efforts to rail yards
Photo credit: L. Williams, Teamsters
On Tuesday, truck driver picketers at the Port of Los Angeles expanded their demonstration to local rail yards serviced by Pacer Cartage and Harbor Rail Transport to seemingly disrupt cargo flow before Black Friday.
Drivers intend to follow trucks from Pacer and HRT to customer locations, including the rail yards, and picket the trucks as they work at those locations.
Truck drivers at the port have been walking off the job since the summer over what they deem is their misclassification as independent contractors. The drivers say companies are keeping them classified as such in order to avoid providing them better pay, benefits and work place protections.
"The truck drivers are already tired. They’re fed up with the abuse, they’re fed up with the injustice and they’re tired of the disrespect they’re giving us," driver Alex Paz said.
Port of L.B to open empty container depot to relieve congestion
On Thursday Long Beach Board of Harbor Commissioners on Thursday approved the use of Port of Long Beach property as a temporary site for the storage of empty containers, which will help to free up needed equipment to move cargo out of shipping terminals faster.
The "Temporary Empty Container Depot" will operate on 30 acres of a vacant, undeveloped area on Pier S on Terminal Island, according to a port statement.
Because many terminals are congested due to the current peak in cargo volume and have no room to accept empty cargo containers, more space is needed to temporarily store those empties.
The port says temporary depot will help put more chassis in circulation. The temporary empty container storage depot will provide a location for truckers to deliver empty containers and remove them from a chassis, freeing up the chassis to pick up and haul more loaded containers to their destination.
Pasha Stevedoring and Terminals, a private company, will operate the depot under a permit that will expire at the end of March 2015, the statement said.
"The depot could be ready to start accepting empty containers in two weeks, which would bring some needed relief to our tenants and the entire supply chain," said Jon Slangerup, Port of Long Beach Chief Executive. "This will help correct the chassis supply imbalance."
The depot is one of several initiatives the port is implementing to relieve the chronic cargo congestion issues over the last two months. A busy peak shipping season, the advent of larger ships and a change in the ownership system for chassis fleets brought congestion to many U.S. ports this year.
"We hear our customers loud and clear. This congestion is not acceptable, and the Long Beach Board of Harbor Commissioners is ensuring that the Port of Long Beach is doing everything it can to see that we clear up these issues now and forever," said Doug Drummond, president of the Long Beach Board of Harbor Commissioners.
In addition to the depot, the port has identified a plan to operate its own chassis fleet for peak cargo shipping seasons and peak demand. Long Beach also facilitated the introduction by private chassis fleets of an additional 3,000 chassis into the local area.
Asia-Europe container rates drop 20 percent
Container freight rates from Asia-to-Northern Europe reportedly dropped more than 20 percent to $934 per-TEU the week ending Nov. 14, according to data from the Shanghai Containerized Freight Index, compared with $1,175 at the beginning of last week.
It was a historic decline on the planet’s busiest trade route—the biggest since the index started tracking the rates in 2009.
Container freight rates went up in 12 weeks of 2014, but fell in 33 weeks, as of Nov. 14.
"Shipping lines have at this point lost control over freight rates," said Jonathan Roach, container-shipping analyst at London-based Braemar ACM Shipbroking. "They are desperately trying to fill their ships while being hit by a double whammy: a renewed global economic slowdown and a persistent overcapacity of ships."
The benchmark Asia-to-Europe as $1,765 per container at the start of 2014. Several attempts by large operators such as Maersk Line and CMA CGM to push through freight increases have failed.
Macy’s CEO Terry Lundgren said he’s worried about the threat of a labor strike at West Coast ports, so he’s enlisting retail leaders to lobby the White House for help.
Lundgren already co-signed a letter asking President Obama to intervene in the West Coast talks, along with the NRF and more than 100 other retail associations.
Now he said he’s asking his friend Doug McMillon, CEO of Wal-Mart Stores, to help.
"There’s a big strike potential on the West Coast right now, and it’s Christmas," he said at Bloomberg’s "The Year Ahead: 2015" conference in Washington. "It’s a holiday period -- we need the inventory to get through the system. This is the wrong time to slow down work."
Wal-Mart’s McMillon contacted Valerie Jarrett at the White House to help move things along, Lundgren said. Frank Benenati, a White House spokesman, didn’t immediately respond to an e-mail seeking comment.
"It’s not on everybody’s radar screen," Lundgren said of the strike threat. "This could take $1.9 billion of GDP out of America per day if we have a dock slowdown."
Macy’s, the largest U.S. department-store chain, said this week that it’s already seen delays in getting products to shelves. Although the company expects the holdups to continue, the slowdown hasn’t yet had a significant impact, Macy’s Chief Financial Officer Karen Hoguet said on a conference call.
At least eight persons, including six women and two men, were killed, and four more injured as they were crushed under metal container that had got detached and slipped off the truck at Pargaon Khandala in Satara district on Mumbai-Bangalore highway (NH4) on Sunday afternoon.
Local police said that people who were killed were waiting for a bus on the highway. The incident took place around 12.30 pm.
Police said that the truck was carrying a metal container box that had sugar in it and was on the way to Pune from Satara. The accident spot is around 60 kilometers from Pune city towards Bangalore.
Maersk intends to end contracts that undermine profits as rates tank
Maersk Line plans to cut unprofitable long-term contracts and raise its shipping rate again as lowered demand and overcapacity will probably to continue for at least two more years, according to a senior executive.
Silvia Ding, who heads South China operations at the unit of Denmark’s A.P. Moeller-Maersk A/S, said in an interview that the current spot rate for shipments moving from Asia to Europe, is unprofitable, and that Maersk will boost its shipping rate once again
She declined to provide details. "We need to be more disciplined in pushing the general rate increase to make sure it is sustainable," Ding said.
Several attempts by the container carriers to push through freight increases have been unsuccessful. In October, Maersk Line announced its intention to raise its Asia-north Europe rate starting Nov. 1.
Ding said that Maersk would consider cutting some of its unprofitable long-term shipping contracts when they come up for renewal. Asia-Europe annual contracts start in April and Asia-U.S. contracts begin in May.
"If we can’t get the rate up to a sustainable level, then in some cases it might mean we have to walk away from certain businesses," asserted Ding.
According to the Shanghai Containerized Freight Index, prices between Asian and European ports fell 21 percent per-TEU to $934, as opposed to $1,175 at the beginning of last week.
UPS chief: An unexpected surge of holiday packages might cost retailers
United Parcel Service thinks its closer collaboration with big retailers will result in a smooth holiday season, but the company will charge customers more or even refuse packages if last-minute sales by a major customer threaten the company's system, according to UPS CEO David Abney.
"With the changes we’ve made, I feel very comfortable about peak (season) this year," Abney told Reuters in an interview at UPS headquarters in Atlanta.
Imposing additional charges or refusing delivery for existing customers would be "the exception versus the rule," Abney said, noting the company has put in place a "control tower" system in which UPS experts manage the flow of packages and troubleshoot.
Last year a late surge in pre-holiday e-commerce sales left an estimated 2 million express packages undelivered in the U.S. UPS was badly affected by the last-minute flood of packages.
Slow cargo flows at Port of Tacoma endanger Christmas tree exports
Thousands of Christmas trees grown in the Pacific Northwest may not be shipped in time to meet holiday demand in Asia, according to industry officials.
Bryan Ostlund, executive director of the Pacific Northwest Christmas Tree Association, said 8 to 10 million evergreen trees grown in Washington state and Oregon are sold as Christmas trees each year, with a large percentage usually bound for markets in Asia, Canada and Mexico.
Trees that should have already been shipped from the Port of Tacoma to make the 23-day journey to Asia are waiting dockside in containers, he said.
"Trees are a perishable commodity, so the clock is ticking," Ostlund said, noting that Tacoma was the primary port for tree shipments. "If they get there too late for the selling season, now what do you do with them?" he said.
Asian orders for more than 12,000 trees, cut and ready for export, have been canceled so far due to delays, and about as many will likely be backed up at the terminal, according to the Agriculture Transportation Coalition.
October imports up, exports down at S. California ports
Congestion is affecting the volume of container traffic at the twin ports, according to officials at the Ports of Los Angeles and Long Beach, who have been struggling with backups due to the advent of larger vessels, the dearth of available chassis and uncertainty over West Coast port labor talks.
The Port of Los Angeles moved 715,682 TEUs in October, 4.6 percent more than in October 2013, according to the latest statistics released this week of the port website. Imports there also surged 7.2 percent to 370,938 units. Exports dropped 6.7 percent to 158,181 units.
In October, the Port of Long Beach said it moved 583,009 TEUs, a 1.1 percent increase year-over-year. Imports also increased 4.1 percent to 310,482 TEUs, while exports fell 14.9 percent to 120,445 TEUs. Last month was the port’s busiest October in four years because of the rise in imports and early holiday shipment from retailers.
Peak season, typically from August to October, has been expanded, port officials said.
NYK loading mishap at Port of Oakland
The U.S. Coast Guard reported three containers fell into the water during offloading of the NYK containership Aquarius at SSA Facility Berth 57 at the Port of Oakland on Nov 15.
Coast Guard crews safely escorted dinner cruise vessels to their berths in Oakland until the containers could be safely removed.
The tugboat Patricia Ann arrived on scene and pushed all three floating containers alongside the dock to be picked up by a crane, according to the USCG statement.