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Fleets Move to Clear Backlog After SoCal Port Strike Ends
This story appears in the Dec. 10 print edition of Transport Topics.
Southern California port truckers returned to work last week, and began moving tens of thousands of containers trapped by the eight-day walkout by the union that represents the port鈥檚 clerks.
鈥淲e鈥檙e glad it鈥檚 over,鈥 Robert Curry, president of port trucker California Cartage Co., Long Beach, Calif., told Transport Topics. 鈥淲e have customers pressing us to pick up freight as soon as possible.鈥
The strike that began on Nov. 27 ended late on Dec. 4, after Local 63 of the International Longshore and Warehouse Union reached a tentative agreement with the Los Angeles/Long Beach Harbor Employers Association. The contract covers 10 cargo terminals at adjacent facilities in Los Angeles and Long Beach, the nation鈥檚 two biggest container ports.
As several hundred drivers at California Cartage and other fleets got back to work, they were tackling a backlog that on Dec. 6 included 26 container ships in port waiting to be unloaded, and six more stuck at anchor waiting for a berth, according to the Marine Exchange of Southern California. Some 20 vessels diverted to other ports during the strike.
鈥淓veryone is scrambling,鈥 said Fred Johring, president of Golden State Express, Compton, Calif. 鈥淓very one of our clients are chomping at the bit to get their freight.鈥
Johring told TT on Dec. 5 his drivers鈥 first move would be to retrieve empties from container yards while he waited for new pickup orders and to return those empties to port terminals to save on storage fees.
Curry said that 鈥渢he congestion is going to be terrible.鈥
鈥淓verything is in the wrong place,鈥 said Dan Smith, a principal for the Tioga Group consulting firm that has done multiple harbor trucking studies.
He was referring to empty containers to be moved back to ships, chassis strewn all over, containers already unloaded from ships but sitting at terminals, as well as cargo on board vessels either at an unloading berth or waiting at anchor for their turn.
Stalled containers loaded with exports such as California fruit have to move, too, added Smith, who鈥檚 based in Lafayette, Calif.
鈥淲e are trying to work off the backlog,鈥 said Josh Owen, president of Ability Tri-Modal, Carson, Calif.
Owen said he and other fleet executives have asked the operators of the PierPass program, which charges a fee for peak- hour use of port gates, to consider waiving the $123 per 40-foot container charge while the backlog is cleared.
鈥淚t is still too early to tell how long it will take to work through the backlog,鈥 said a spokesman for National Retail Systems, which has five facilities in Southern California. 鈥淲e are seeing a definite increase in congestion around the port.鈥
鈥淭he hardship on the drivers has been significant,鈥 the spokesman said. 鈥淛ust think about if you lost 2% of your annual salary right before the holiday. Hopefully, they can recoup some of that lost pay in the coming weeks before Christmas.鈥
Owen said that drivers understand the 鈥渇east and famine鈥 nature of the slower December cargo season and see the opportunity 鈥渢o make a lot of money clearing the backlog.鈥
Smith estimated that as many as 150,000 truck trips will be needed to remove the backlog, in addition to the regular daily cargo volume. He gauged that two full workweeks would be needed to get port trucking back to normal.
鈥淓ven though a majority of holiday shipments were already here, [the trapped cargo] was the last big push for end of the season products as well as early spring products,鈥 said National Retail Federation Vice President Jon Gold, adding, 鈥淭his includes everything from apparel to footwear to consumer electronics to home goods.鈥
Smith said, however, that empty containers that once carried that holiday cargo are flooding into Southern California by rail now.
Smith characterized the ocean terminals themselves as 鈥渁 mess鈥 because customers will want their goods right away.
That disrupts the ability for truckers and terminal operators to prioritize between higher and lower value goods to smooth the freight flow.
While labor peace was reached in California, talks continued last week between the International Longshoremen鈥檚 Association and port employers on the East and Gulf coasts. That contract expires Dec. 29 after a 90-day extension worked out by the Federal Mediation and Conciliation Service as an earlier strike deadline approached.
The West Coast stoppage could be repeated in a matter of weeks, one analyst told TT.
鈥淭he actions on the West Coast, we think, are a sign of what鈥檚 to come in union negotiating tactics with the ILA,鈥 said Stifel, Nicolaus & Co. analyst David Ross.
鈥淭here is a good probability of a strike as the unions feel that after the Obama win they now have one last chance to stick it to employers with unreasonable demands.鈥
The terms of the Local 63 agreement were not released. Union members 鈥 whose annual compensation averages $145,000 for a 40-hour week 鈥 said that they walked out to prevent the outsourcing of jobs. They had been working without a contract since 2010.
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