West Coast Port Congestion Could Delay Your Intermodal Shipments

You may have heard on the news recently that West Coast ports have been clogged, delaying the importation of international goods.  This is having an effect on both intermodal and truckload shipping. Here’s the lowdown on the problem and how it could affect you.

What’s going on?

West Coast ports, particularly those in California, have experienced slowdowns and delays on their docks. Ships are lining up at sea, waiting their turn to get in, as it’s taking longer to unload the cargo of each ship while it is in port.
Longshoremen (those who load and unload ships) are purposely taking their time with each ship, which forces the draymen (truck drivers who transport the cargo from the port to the rail) to sit idle. The draymen are getting paid less due to the longshoremen’s slowdown, which has led to them picketing at the ports. Dockworkers are walking out mid-shift in retaliation.
The culmination of all this: major port congestion that is crippling productivity and movement of goods across the U.S. You’re probably wondering why on earth this is happening.

What’s the cause?

Longshoremen are on strike due to the lack of salary negotiation on their contracts and refusal of the ports to recognize them as employees, not contractors.
This all started back on June 30th, when the last contract expired between the Pacific Maritime Association (PMA), which represents employers operating shipping lines and port terminals, and the International Longshore and Warehouse Union (ILWU). The two parties have yet to negotiate the next contract for the dockworkers, which would recognize workers as employees in order to receive certain benefits.
In the past five months, scrutinizing accusations have been thrown between the ILWU and the PMA. The ILWU claims that the PMA is refusing to negotiate the contracts and blaming its members for the port jamming in its entirety. In return, the PMA is accusing the ILWU of deliberately coaching its members to halt dock operations by conducting over-exaggerated inspections and working as slowly as possible.
The truth is that the ILWU is coordinating work slowdowns and additional inspections, which have caused productivity to plummet. So far, the ports that have been affected are The Southern California Region, Port of Seattle, Port of Tacoma, Yusen Terminal, Long Beach Container Terminal, APM Terminal, Seaside Transportation Services, and Total Terminals International.
Aside from all of the contract negotiation and labor issues going on, there were already problems affecting the ports prior to this. These include a higher volume of mega-ships (more cargo and longer wait times), chassis shortages, shortage of dray carriers, and a higher volume of shipments.

What’s the prognosis?

Recently, the National Retail Federation wrote a letter to President Obama, citing concern of a looming port shut-down if there was not intervention by a federal regulator to negotiate the dockworkers’ contracts. Obama responded by saying that the PMA and ILWU will work it out themselves in due time.
With that being said, no contracts have been negotiated yet. This could mean continued and worsened port delays and backups. The more that the ILWU backs the longshoremen’s strike, the more the draymen and drivers will picket, which increases the likelihood of an eventual port shutdown. This could create a domino effect, affecting imports on the East Coast as well.

What impact will this have on you?

In response to the congestion that is now affecting many of the West Coast ports, carriers are now tacking on surcharges to make up for the loss of profit due to the increasing time it takes to move and be unloaded. This could mean higher costs to get your shipment onto the rail, plus longer transit times overall.
Luckily, the Federal Maritime Commission (FMC) has been keeping a close eye on these shipping surcharges. Shipments that are already in-transit, or waiting to be unloaded, are not eligible to be assessed fees.
Even though the turmoil between workers, unions, and the PMA seems to be unrelenting, there are still options for getting your goods from the West Coast and distributed throughout the country. Trinity offers intermodal, truckload, and LTL services. You may need to rely on a different mode of transportation than you normally do. Depending on the lane, some of these modes may be temporarily more expensive or take longer than they usually would. We can be your trusted resource in determining the most cost-effective and logical way to move your freight during this turbulent time.
Rest assured that Trinity is staying informed on the port congestion issue as it unfolds, and our sales representatives will be able to provide you with the best avenue to keep your freight moving.
Sources:
“Labor strife threatens West Coast ports”, The Produce News
“Dozens of vessels heading to US West Coast ports face dock congestion”, JOC
“Shipping companies announce container surcharge at ports”, The Seattle Times