Cargo Business Newswire ArchivesSummary for November 24 through November 28, 2014:
Monday, November 24, 2014
L.A.-Long Beach port truckers stop picketing 3 local trucking firms
Photo credit: Teamsters
Port truck drivers at L.A/Long Beach have stopped picketing at three local trucking companies after meetings late last week with the companies and union officials led to "productive confidential dialogue" concerning drivers’ pay and workplace issues.
Drivers decided late Thursday to stop picketing trucks belonging to QTS Inc., LACA Express, and WinWin Logistics, with whom they intend to meet to "resolve outstanding issues between them," according to a joint statement by Mayor Eric Garcetti, the trucking firms and the Teamsters, the union that wants to represent the truck drivers.
"All sides have expressed an interest in sitting down and continuing confidential discussions of these issues and challenges facing the drayage industry," according to the joint statement. “QTS Inc., LACA Express, Inc. and WinWin Logistics, Inc. each respect drivers’ right to choice with regard to unionization.”
Truckers will continue picketing trucks from Pacer and Harbor Rail Transport.
Drivers are protesting their designation as independent contractors, which they say allows companies to skirt labor laws and deduct fuel and other costs from their paychecks.
ILWU and PMA to resume West Coast port labor talks Dec. 2
Contract talks for dockworkers at 29 West Coast ports will take an unexpected break, now that the International Longshore and Warehouse Union has called for "small table" talks Thursday, triggering complaints from the Pacific Maritime Association about what amounts to a 12-day "extended break."
The full negotiating teams for the union and the association representing the employers will reconvene Dec. 2.
The maritime association accused the union of taking the slowdown to the negotiation table, alluding to their assertion that California and Washington state dockworkers at major ports are deliberately working slower as they load and unload ships at port terminals.
Pressure has been growing from retailers and other stakeholders for the two parties to resolve the labor conflict at the West Coast ports.
The PMA said in a statement that the ILWU is refusing to agree to a temporary contract extension – similar to one it signed over the summer – despite multiple requests by the PMA. A contract extension would give both parties access to the well-established waterfront grievance process, and give employers recourse if the ILWU slowdowns continue.
"We have made it abundantly clear that we believe these negotiations are of the utmost importance and should continue at full strength until the Thanksgiving holiday," said PMA spokesman Wade Gates. "We are disappointed the Union is not showing the same urgency to resolve the issues between us."
A union spokesman said negotiations were going well and the change was a chance to tackle tough issues in small groups.
SC Ports Authority accepts $15M offer for Port of Port Royal
After a ten-year attempt to sell the Port of Port Royal, the S.C. State Ports Authority says it has accepted a $15.42 million offer from The Furman Co. of Greenville.
The agreement now needs to be approved by the state’s Budget and Control Board, who will vote on the matter Nov. 26 in Columbia.
If approved, The Furman Co. will have 150 days to complete its due diligence and another 30 to close the deal, according to board chairman Bill Stern.
Representatives of the Beaufort Regional Chamber of Commerce, Port Royal Town Council members, the town manager and residents who made the trip to Wednesday's meeting in Charleston support the SPA decision to sell.
The port has been vacant since 2004, when it was judged to be too expensive to operate. The authority was ordered to sell the land, but three attempts since 2006 have been unsuccessful.
Furman president Steve Navarro issued a news release that said in part: "Over the next few months we will be actively planning a strategy to determine the property's highest and best use, density and scale, and to analyze its potential for financial success."
Port of Oakland cargo volume surged in October for a total of 73,000 TEUs, up more than 6,000 TEUs compared to the same period in 2013.
Oakland has been increasing its import business, according to port Maritime Director John Driscoll, "by taking advantage of our available capacity. Customers need a way around congestion and they are beginning to see Oakland as a solution."
But that fix could be short term. The congestion Driscoll refers to that’s affecting cargo at the Ports of Los Angeles and Long Beach, is exacerbated by the threat of prolonged labor-management disruptions up and down the West Coast that will likely affect Oakland at some point.
Longshoremen there staged a "safety stand down" Thursday in Oakland in the wake of a worker’s death at the Port of Benicia, caused by what has been reported as a medical condition.
Temporary work stoppages also happened at the ports of Benicia and Redwood City. And last week, union members at the Port of Oakland walked off the job in protest of working conditions, a familiar action repeated up and down the West Coast in recent weeks.
And it could get worse if long-running contract negotiations for longshoremen at West Coast ports, who have been working without a contract since July, don’t come to a satisfactory conclusion soon.
Congestion appears to be a root cause of the unrest. A shortage of chassis, bigger container ships and a truck driver shortage are all contributing to cargo bottlenecks at the ports.
And with too many goods crammed into too few containers, and too little, often inefficiently located, equipment at the docks, conditions become increasingly unsafe for workers.
"It’s the devastating congestion crisis that is the single biggest cause," says Craig Merrilees, communications director of the International Longshore and Warehouse Union Local 10 and Local 34. "It’s cascaded all the way into the talks."
Both sides have kept mum about the contract issues that remain on the table after six months of negotiating, but John McLaurin, president of the Pacific Merchant Shipping Association, agrees that congestion, especially at Los Angeles and Long Beach, is a root problem.
"Larger volumes, larger ships — moving cargo is not as simple as it used to be," he said. "A lot of the changes haven’t sorted themselves out. Labor is just one component."
For labor, the congestion and the inadequacies of the unloading process have created serious safety issues.
"Shippers say longshore workers are not working hard enough. And it’s not just a congestion disaster, it’s dangerous." said Merrilees. "Improving the safety code absolutely has to be one of the issues" at the contract talks.
Port of Oakland closed Thursday after death of dockworker
Longshore workers halted work Thursday at the Port of Oakland after the death of a colleague working on a ship docked in Benicia on Wednesday afternoon, according to a spokesman for the International Longshore and Warehouse Union.
Thomas Hoover, 56, evidently collapsed on the job at the Port of Benicia, ILWU spokesman Craig Merrilees said.
Hoover, a member of ILWU Local 10, was rushed from the Port of Benicia by ambulance to Kaiser Permanente Medical Center in Vallejo, where he later died.
The coroner's office was notified of the death at 4:38 p.m. but no autopsy is planned since it looks like Hoover suffered an asthma attack or cardiac arrest and his death was due to natural causes.
All worker deaths are treated as workplace fatalities and subject to investigation and workers routinely stop work for 24 hours without pay following an on-the-job fatality, according to Merrilees.
Port truckers end 8-day walkout at Los Angeles and Long Beach
Port truckers ended an eight-day walkout Friday after the two remaining holdout area trucking companies decided to meet with union officials about wages, employee status and other labor issues.
The walkout exacerbated some of the cargo snarls at the port complex, which has been experiencing severe congestion and delays due to larger container ships, a dearth of available chassis, and contract agreement between dockworkers and their employers that has been unresolved since the last one expired on July 1.
Drivers agreed to stop picketing Pacer Cartage and Harbor Rail Transport when the companies agreed to accept drivers back without retaliation and to talk to Teamsters, the union representing them.
"The Teamsters and Harbor Rail Transport have agreed to continue discussions to resolve outstanding issues between them," Harbor Rail said in a statement. "Both sides have expressed an interest in sitting down and continuing confidential discussions of these issues and challenges facing the drayage industry. HRT respects its drivers’ right to demonstrate and there will be no retaliation."
"By striking, we showed Pacer and the entire logistics industry that we aren’t going to take it anymore," said Pacer driver Humberto Canales. "The days of driver misclassification are numbered. We are employees and the law is on our side."
Drivers have been on protesting at port terminals and trucking facilities since Nov. 13 and have spread pickets to a rail yard that Pacer and Harbor Rail services.
Trucking companies that were the target of protests included TTSI, Green Fleet, Pacific 9, QTS Inc., LACA Express, and WinWin Logistics, which all eventually agreed to talk to the Teamsters to try to resolve the drivers’ complaints.
Port chief says Charleston is free of congestion, unlike West Coast rivals
As chronic cargo congestion plagues West Coast ports, the CEO of the South Carolina State Ports Authority (SPA) differentiated the Port of Charleston and close rival Savannah from its left coast counterparts.
"Our ports work," Newsome said before a board meeting Wednesday. "Our ports are working very well right now. We don't have congestion issues. We don't have performance failures like you're seeing in the Northeast, like your seeing on the West Coast.
"I don't like to see any gateway not perform well," Newsome continued. "I don't think that's healthy. On the one level, it doesn't help people's confidence in an international supply chain. So you can picture that you're in Target and all this happens in the U.S., and you have some executive ... saying, 'Wait a minute. I'm sourcing all this stuff in China ... and I'm seeing all this stuff getting hung up on the West Coast. Maybe I should source domestically instead.' That's not good for the industry, in my mind."
But Newsome admits East Coast ports are benefiting from delays on the West Coast, which are causing some shipments to be rerouted to other destinations.
"But from a competitive viewpoint? Yeah, we benefit as long as we work and the others are having problems and people look at doing different stuff," Newsome said. "So there are two levels."
Newsome noted the ports of Los Angeles and Long Beach essentially serve as landlord, renting their harbors and commercial dock space to more than a dozen shipping lines. Conversely, the SPA has resisted recommendations to cash in and privatize, and maintains its state-run, owner-occupied port system.
Newsome conceded the South Carolina way cuts against most free-market instincts.
"It doesn't sound logical," he said. "But our public-sector operating model, where we control essentially the product and the gateway - that's the best model. That is proven to be the best model - if you believe efficiency and productivity and costs are indicators of what's a good model."
CMA CGM reports record high third quarter volumes, income in Q3
French shipping giant CMA CGM posted record third quarter results, including a significant increase in net income at $201 million and an 8.3 percent increase in volume.
The board of CMA CGM Group, the world’s third largest container shipping company, met under the chairmanship of Jacques R. Saadé, chairman and CEO, to review the financial statements for the third quarter of 2014.
During the third quarter of 2014, CMA CGM reported consolidated revenue at $4.4 billion, a 6.4 percent year-over-year increase. Volumes increased by 8.3 percent to 3.2 million TEUs, compared to the same time last year.
Carried volumes have reached their highest level over the group’s history. This growth stems from steady growth in the Asia-Europe trades, and in Intra-Asia and Oceania, where the company operates through expert subsidiaries such as ANL or CNC.
In Africa, CMA CGM said it has continued to expand its maritime and intermodal activities, offering new service offerings and opening new land corridors, under the CMA CGM or the DELMAS brands.
The shipping line has expertise in reefer transport, recently purchasing 7,000 new reefer containers and intends to carry 1 million reefers in 2015.
The group reported its net income amounted to $221
201 million in the 3rd quarter of 2014, compared with a net income of USD 70 million in the 3rd quarter of 2013.
The "CMA CGM Elbe" was delivered in October joining the "CMA CGM Danube," which was delivered during the second quarter, this vessel belongs to a series of twenty-eight 9,400 TEU vessels.
The group will also take delivery of six 18,000-TEU vessels in 2015.
In July 2014, CMA CGM signed an agreement with Adani Ports, related to a 4th container terminal in Mundra, the statement said.
The strategic operational agreement between CMA CGM, CSCL and UASC, announced in September, will be implemented in early 2015, according to the statement.
Maersk Line CEO Søren Skou said he was concerned about the state of the container shipping industry, stating that the shipping giant would settle for lower margins if that meant more of its rivals were profitable.
Competitors that lose money drive rates lower, Skou said, and worsen indusgry overcapacity since lack they are not employing the discipline found in other industries.
Maersk announced an operating margin of 8.2 per cent in the second quarter – 8.5 percentage points higher than an average of more than a dozen competitors.
Maersk expects a full-year net profit of more than $2 billion due to to an extensive cost saving programs, including the 2M Alliance and the additions of Triple E Class ships, the world’s largest, to its fleet.
Freight stakeholder coalition briefs Senate staff on freight congestion
Representatives of the Freight Stakeholders Coalition briefed U.S. Senate staff last week about the impact of freight mobility on transportation providers, system users, and the national economy, according to a coalition statement.
The FSC said that Leslie Blakey, president and executive director of the Coalition for America’s Gateways and Trade Corridors, suggested that West Coast port congestion issues have been exacerbated by a lack of government funding.
"Following years of federal underinvestment in our freight network," Blakely said, "the infrastructure now lacks elasticity needed to accommodate any activity that deviates from business as usual." She noted that congestion issues are not confined to the West Coast, and a continued pattern of federal underinvestment threatens our rebounding economy.
Kurt Nagle, president and CEO of the American Association of Port Authorities, said global trade continues to grow and currently accounts for nearly one third of the U.S. economy. Stressing the importance of a national system, Nagle explained that, "for a national freight system to be successful, it must touch every state and both prioritize and sustain investment."
Drawing attention to the long list of associations supporting freight infrastructure investment, Chuck Baker, president of the National Railroad Construction and Maintenance Association, said congressional action to invest in freight infrastructure would be met by a broad coalition of backers.
Baker noted freight investment is the "ultimate bipartisan issue," critical to job creation and economic growth. "Right now the U.S. freight transportation system is a source of tremendous comparative advantage for U.S. manufacturers, U.S. shippers, U.S. exporters," said Baker. "We are on the precipice of squandering that advantage."
The FSC is a group of associations representing shippers, transportation providers, owners and operators of infrastructure assets that move goods across the U.S.
ILWU official: West Coast ports won’t shut down
Although cargo movement may be slowed at West Coast ports, they will not shut down during the holiday season, according to Craig Merrilees, spokesman for the International Longshoreman and Warehouse Union.
Contract negotiations between the ILWU and the Pacific Maritime Association to replace the dockworker contract at West Coast ports that expired July 1 took a contentious turn recently when the PMA accused ILWU workers of slowdowns at the ports of Los Angeles, Long Beach, Seattle and Tacoma.
The ILWU said the port congestion was due to big changes in the shipping industry. He cited a current lack of available truck chassis, larger container ships, and a shortage of truck drivers.
When the blame game started, retailers started to get nervous, and more than 100 organizations signed a letter to President Obama. They are asking for federal intervention to prevent what they saw as an imminent shutdown of West Coast ports.
"Nobody wants to shut down the ports," Merrilees said. "Nobody on either side of the negotiating table is talking about shut downs."
Last week, the PMA sent out the latest in its series of press releases about the contract talks. They complained that the union is taking a 12-day break from the major negotiating table in order to convene small working groups.
"Everyone remains committed to reaching a fair agreement as soon as possible. We believe the small working group/committee format is moving that process along," Merrilees said.
Egypt to renegotiate agreement extension with Suez Canal Container Terminal
Egypt wants to renegotiate an agreement extension worth $1.5 billion with Suez Canal Container Terminal, which has a concession to run East Port Said near the entrance to the canal, according to government officials.
Ahmed Amin, an advisor to Egypt's transport minister, attended talks with SCCT, which is 55 percent owned by Maersk’s APM Terminals.
Amin said that December talks with SCCT would focus on altering the terms of the 14-year extension of the concession for East Port Said.
The current extension agreement partially exempts SCCT from rent and other fees in exchange for SCCT building an $80 million pier. But Amin said the terms of the extension were actually worth more than $1.5 billion.
SCCT's commercial chief executive Lars Koch-Soelyst did not comment on the value of the terms but said that talks to find solutions were ongoing.
Egypt is currently digging a new Suez Canal beside the existing 145-year-old channel that connects Europe with Asia. The government hopes the $8 billion project will stimulate global trade and generate much needed revenues following a downturn caused by three years of political unrest.
APM Terminals, the port operations arm of A.P. Moller-Maersk, has signed a memorandum of understanding with the government of Ghana to expand Tema Port.
APM Terminals said the agreement included a "private investment" of more than $1 billion by Meridian Port Services. APM owns a 35 percent stake in Meridian.
"Both in the short- and long-term view, we see Ghana as a country with great potential," said Peder Sondergaard, head of Africa and Middle East activities for APM Terminals.
Meridian Port Services is a joint venture between APM Terminals, Bolloré Africa Logistics and the Ghana Ports and Harbours Authority. It handles approximately 80 percent of all containers in Tema Port.
The expansion plans for the port, which posted a total container volume of 670,000 TEUs in 2013, include the development of four deep-water berths and an access channel that can accommodate larger container ships. A six-lane highway will also be constructed between the port at Tema and Accra.