Thursday, April 9, 2015

Hapag-Lloyd Eliminates Port of Portland Calls

By Mark Edward Nero

The Port of Portland, which in early March lost Hanjin Shipping’s direct call service, has now seen Hapag-Lloyd depart for good, the German-based carrier confirmed April 7.

Hapag-Lloyd had represented 19 percent of the business at the port’s lone container terminal, while Hanjin had represented 80 percent, averaging about 1,600 containers per week.

The exit of both carriers means that Portland lost 99 percent of the business at the terminal in less than two months.

In a written statement, Hapag-Lloyd implied that Portland was being dropped from its service between the Mediterranean and the US due to workflow difficulties at Terminal 6, the port’s sole international container terminal.

“We are omitting Portland in the future in our MPS service (Mediterranean Pacific Service),” spokesman Rainer Horn said in an explanatory statement. “The decision was taken in order to maintain the schedule integrity of the (Mediterranean Pacific Service). Therefore customers will also benefit from the decision.”

The Port of Portland has been struggling for years with labor issues that have drained productivity. In early February, ICTSI Oregon, which operates Terminal 6, said productivity at the facility had fallen “well below acceptable historical levels.” In the final quarter of 2014, International Longshore & Warehouse Union labor was producing only about 13.2 moves per hour, compared to 24.8 moves/hour in May 2012, a roughly 47 percent reduction, according to the terminal operator.

The labor issues are related to a jurisdiction battle between ICTSI, the ILWU and another union, the International Brotherhood of Electrical Workers, which date back to June 2012. The two unions were fighting over disputed jobs involving the plugging/unplugging and monitoring of refrigerated containers at Terminal 6.

Since then, workers have walked off the job numerous times due to what the longshore union calls “multiple pay disputes and associated grievances” associated with the “mismanagement” of the terminal.

The dispute, which is completely unrelated to the contract talks between the ILWU and Pacific Maritime Association that were resolved with a new contract in February, has led to multiple container ships bypassing the port over the past two-and-an-half years in order to avoid the situation.
In a statement on Hapag-Lloyd’s departure, ICTSI laid the blame at the feet of the ILWU and said that attracting new business will be challenging.

“For Terminal 6 to be successful, the ILWU must signal to potential container shipping lines that its almost three-year campaign of work stoppages, slowdowns, and safety gimmicks at Terminal 6 has come to an end,” the statement read in part. “No carrier will want to make a long-term commitment to the terminal so long as ILWU workers delay cargo and vessels as a strong-arm tactic to get what they want.”

The ILWU thus far has not responded to ICTSI or responded to requests for comment on Terminal 6’s loss of Hapag-Lloyd.