Escaping the storm

With tales of hundreds of millions of dollars in waste and lost orders being bandied about, an erroneous perception is that all operators and ports on the US West Coast suffered the same during the congestion crisis caused by the negotiation snags between the ILWU and employers, made up largely of the terminal operators.

In fact, traffic at bulk and breakbulk terminals was mostly untouched by the mayhem and bickering. A good indication is given by Drewry of the number of vessels anchored off Long Beach and Los Angeles during the worst of the crisis. Waiting non-container ships reached a maximum of 12 on any one day, compared with almost 30 container vessels.

Actual volumes paint the same picture: figures collected by economic and maritime analytics group Zepol show that during January and February, the most critical period of the slowdown, non-containerised shipments (vessel loads), as distinct from volumes and tonnage, increased significantly through the US West Coast’s main ports. Nationally there was a 5% increase in breakbulk shipments, compared with a 6% drop in container shipments.

“Non-containerised imports generally weren’t affected by the West Coast slowdown, in fact, breakbulk imports actually increased by 5% in the first two months of the year,” states chief executive of Zepol and trade data expert, Paul Rasmussen. “Container shipments took the biggest hit. Our data found that US imports of containerised shipments declined by 6%, which was mainly due to a 24% drop in containers at the ports of Los Angeles and Long Beach.”

Good liquidity

From anecdotal evidence available to Port Strategy, it appears that liquid bulk was the least affected, a pattern that seemed to prevail at all ports. For breakbulk and bulk, a type of cascade effect seemed to be the main reason for delays. Vessels were held up because container traffic was causing a logjam in movements, with so many vessels waiting within port boundaries and bulk/breakbulk unable to get to their berths.

Three factors are apparent as to why the sector emerged largely unscathed. Scheduled vessel calls are much looser and more spread out, making berthing windows easier to meet. “Even if the dockers’ union imposes work-to-rule restrictions or the Pacific Maritime Association limits terminal operating hours, there is time to spare to make the window,” says a port bulk terminal executive.

Coupled with that is the use of much more automation, with far fewer dockworkers – particularly in cranes — and sometimes direct vessel to railcar because ports have made a point in recent years of spending heavily on on-dock rail.

And perhaps of even more importance, grain exporters have a different contract agreement to container terminals. More than a quarter of national grain exports (including half of wheat exports) move through Oregon and Seattle ports. “We have a separate agreement with the dockworkers which goes back to 1963,” says the vice president of one of the country’s largest grain exporters. “We were not part of the latest negotiations between the PMA and the ILWU.”

That may be so but they have gone through their own labour ordeals. In 2014 they signed an agreement with the trade union after negotiations over a contract that had expired more than two years before. And during that time there were lock outs, suspected sabotage and public accusations that the arbitrator appointed by the federal government was colluding with state and union officials to block an agreement.

Train trial

But bulk/breakbulk did suffer from one of the effects of the crisis that bedevilled container ports: the reduction of train services. Peter Friedmann, executive director of the Agriculture Transportation Coalition, summed up the consequences. “Perishables have been knocked out of markets, and our customers overseas have been forced to find other, non-US, sources for their meat, fruit, hay, cotton, rice, nuts, french fries, lumber, and so much more.

“There is nothing that we produce in agriculture here in the US, which cannot be sourced elsewhere in the world. If we don’t supply dependably and affordably, we lose that business.”

San Diego’s reduction during the two months was apparently only partly due to the union problems. “The ILWU/PMA deadlock affected the Port of San Diego for two weekends in February,” says port spokeswoman Marguerite Elicone. “Although it didn’t have as a tremendous effect as it did on the ports of Los Angeles and Long Beach, we still had delays in offloading our weekly container ship bringing Dole Fresh Fruit from South America. We also had about two auto carriers that were delayed offloading by about a day. If the lockout were to continue, it would ultimately affect our customers’ schedules.”

“On a positive note, though,” says Ms Elicone, “we were able to gain some businesses from a mid-size carrier that was diverted to our port from LA/Long Beach. This business included 4,500 pallets of citrus that were trucked to the Port of San Diego from the Inland Empire. The pallets were then loaded onto a vessel bound for South Korea.”