October 27, 2014 | Industry Insights

Contract Failure Leads to Port Congestion

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Contract Failure Leads to Port Congestion

Congestion at U.S. and Canadian West Coast ports is getting worse by the day in the absence of a signed contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.

The congestion problem is causing containers to back up on the docks, trucks to wait in long lines, and importers and exporters to divert cargo. Solutions have been proposed, but the lack of a labor contract is preventing implementation or action. As a result, Los Angeles has designated three sites at the harbor as overflow yards where containers and chassis can be stored, but terminal operators aren’t taking the port authority up on the offer.

Without a deal with labor on maintenance and repair, nobody feels they can make a decision, Port of L.A. Chief Gene Seroka said at the Western Cargo Conference of freight forwarders and customs brokers in mid-October.

The ILWU has stepped up safety checks of automated facilities in an effort it says is necessary to ensure defective equipment doesn’t create a safety incident. TraPac, a terminal operator in Los Angeles, says the group is merely trying to secure manpower requirements and is, in the process, slowing traffic.

Mega-alliances are another cause of port traffic congestion, Seroka says, a phenomenon seen even at ports known worldwide for their efficient operations. The mega-alliances bring cargo in by large container ships operated by multiple carriers and cause an extra layer of complexity as truckers must move across multiple terminals to match containers and chassis.

All of the operational problems could have solutions, but none will be found until a labor agreement is constructed and approved, analysts say. A tentative contract is just the first step of a 30-45 day process that creeps into the holiday season. The National Retail Federation has weighed in with the two sides on the importance of a contract and resolution to the port delays. Retailers are in the midst of their heaviest shipping season of the year, NRF President and CEO Matt Shay said in a letter. Retailers had instituted costly contingency plans to ensure timely delivery of merchandise, but the West Coast port congestion has “eviscerated those preparations,” Shay complained.

Logistics experts, such as freight forwarders, property brokers and third-party logistics providers, often are the primary source of risk information to cargo customers, who may rely on them for advice and guidance on the entire transportation process. Roanoke Trade can help logistics providers with high-quality, competitively priced and easily managed shippers interest insurance that allows you to get your clients the insurance they need. We also provide a customizable program of cargo insurance throughout the distribution supply chain. When crises arise, Roanoke is there.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE.

Sources: American Shipper, Joc.com

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