When the CMA CGM Benjamin Franklin pulled out of Los Angeles in late December after an unprecedented effort by the port community to work the largest container ship ever to call at a North American port, no one was prouder than the International Longshore and Warehouse Union.
“It was gratifying to see how well we did, to be part of it,” Paul Trani, president of ILWU Local 63, told a town hall meeting Wednesday sponsored by the Center for International Trade and Transportation at California State University Long Beach.
The Benjamin Franklin, with a capacity of 18,000 20-foot container units, made a second Southern California visit in February, calling at Long Beach, and CMA CGM announced that beginning in May, it would operate a weekly service with six 18,000-TEU ships, presenting the largest U.S. port complex with a challenge to repeat the success of its first two efforts on a weekly basis.
After experiencing one of their worst years in more than a decade during the 2014-15 ILWU-Pacific Maritime Association contract negotiations, Los Angeles and Long Beach may have needed the successful handling of the Benjamin Franklin to bring labor, management, trucking companies and beneficial cargo owners together for the good of the port community.
Michael Christensen, senior executive lead, supply chain optimization at the Port of Long Beach, compared the Southern California port and transportation community to a typical family where everyone enjoys poking each other in the eye, “but when threats come to the family, we band together.”
The ports of Los Angeles and Long Beach actually began the healing process in April 2015, after the tentative contract agreement between the ILWU and PMA was reached, by launching a supply chain optimization effort, with approval from the Federal Maritime Commission that allows all of the port stakeholders to meet regularly and agree to implement measures that will improve cargo velocity.
Christensen said the first meeting included more than 100 representatives from throughout the port community. Subgroups have since been formed to uncover the bottlenecks in the local supply chain, including marine terminal productivity issues, long truck queues at the terminal gates and sporadic chassis shortages, and to explore possible solutions such as mandatory trucker appointment systems, free-flowing cargo rapidly from the vessel to off-dock storage yards and possibly an evolution toward 24/7 gates.
Trani compared marine terminals in Los Angeles-Long Beach in this era of mega-ships to his garage, where he said it is impossible to fit another piece of furniture inside. “The key is that there is only so much land here. We have to push the cargo out without letting it sit on the terminals,” he said.
The problem with marine terminals at many ports is that neither the terminal operator nor the BCOs plan ahead for the delivery of containers to the truckers. A process of random access is triggered when the container is discharged from the vessel and clears Customs. The BCO is notified, and the trucker is dispatched to the terminal, along with hundreds of other truckers on a similar mission. Trucks back up waiting to enter, while terminal operators send longshoremen to hunt and peck for each specific container destined to be picked up by a particular trucker.
This random access operation can be replaced through a sharing of real-time information on the status of shipments so the BCO, trucker and terminal operator can plan ahead for the eventual release of the containers, said Steven Miller, chief procurement office at P.F. Chang’s restaurants. The data is out there, and the information technology tools are available. The only impediment to advanced planning is the failure of all of the parties involved in a shipment to share the information with each other, he said.
BCOs pay a price for the failure of the random access model in the form of late shipments, demurrage charges because their trucks are unable to access the containers due to terminal congestion, and, ultimately, unhappy customers. Miller said a restaurant cannot tell a customer who orders a shrimp dinner in December to come back on Jan. 15 after the shrimp arrive from the port.
The Harbor Trucking Association of Southern California is engaged in a turn-time 2.0 project that will analyze real-time information on truck movements throughout the harbor, said Fred Johring, president of Golden State Express/Logistics and chairman of the HTA. Truckers and the terminals will be able to track truck movements at each step of the visit, so that if delays consistently occur at the entrance gate, in the yard, at the out gate, at certain times of the day or in processing shipment documentation, the terminal and truckers can drill down to the exact time and location of the delays and address those problems, Johring said.
Terminal operators are banding together to add predictability to truck traffic by implementing mandatory appointment systems. Five of the 13 container terminals in the port complex already have appointment systems, and five more are expected to have them up and running this year. Tracy Burdine, director of client services at Yusen Terminals, said YTI is developing its appointment system around the needs of the truckers, who are concerned that because of cargo surges from big ships that congest the terminals, as well as traffic congestion on local roads, drivers will have trouble keeping to the appointment times if windows are too narrow.
Johring said truckers also want a single portwide portal that will allow them to access information from all of the vendors with which they interact. In order to complete a day’s book of business, a trucking company today must scan the websites of 40-plus terminal operators, chassis providers and other entities involved in a shipment, he said.
Although the speakers agreed that ultimately at a large port complex such as Los Angeles-Long Beach, which last year handled 15.4 million TEUs, a complex process will eventually have to developed in order to operate 24/7. Terminals must be assured of steady business 24 hours a day, and the ILWU contract may have to be reworked. Truck drivers, for example, must comply with federally mandated hours-of-service regulations, which means that additional drivers will be needed to work 24/7. Also, the ILWU contract specifies that the third shift, the so-called hoot-owl shift, lasts only five hours, which for many terminals is simply not cost-effective.
Extended hours also raise the question of who will pay the terminal operators for maintaining round-the-clock gates that cost a good deal to run but generate no revenue for the terminals. For the past 10 years, Los Angeles-Long Beach has been the only U.S. port with a formal program of night and weekend gates under PierPass Inc. John Cushing, PierPass president, noted that BCOs who send their trucks to the terminals during the peak-traffic day shift help to fund the night shifts through a traffic mitigation fee. That fee, which is already criticized by BCOs and truckers who charge that it is not transparent, covers only a second shift each day, so who will pay for a third shift if it is implemented? Cushing asked.