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Friday, February 6, 2015

PMA Threatens Lockout, ILWU Says Deal Close

By Mark Edward Nero

The International Longshore & Warehouse Union says that a deal with the Pacific Maritime Association on a new labor contract is “imminent” and urged the PMA to not walk away from negotiations and impose a lockout as the employers’ group has said it might do within a week.

“We’re this close,” ILWU President Robert McEllrath said of negotiations. “We’ve dropped almost all of our remaining issues to help get this settled – and the few issues that remain can be easily resolved.”

“Closing the ports at this point would be reckless and irresponsible,” McEllrath said, stating that if the PMA closes the ports, “the public will suffer and corporate greed will prevail.”

The statement was a response to an “all-in” contract offer made by the PMA on Feb. 4 that suggested that the employers group could lock workers out if no deal is reached in the next five to 10 days.

According to the PMA’s latest contract offer, full-time ILWU workers would see their wages rise roughly three percent per year under the proposed five-year contract. The proposal also includes a provision allowing dockworkers to keep their current fully paid health care, which the employers’ group says costs employers $35,000 per worker per year.

Also, the PMA says, the maximum ILWU pension would rise to $88,800 per year.

“I hope the ILWU leadership will give very serious consideration to this contract offer, which I believe respects their members and gives us a clear path to conclude these talks,” PMA President Jim McKenna said. “We owe it to workers and businesses across the nation to resolve our differences and get our ports moving again.”

The PMA and ILWU have been engaged in contract negotiations since May. The previous six-year labor pact between the two sides, which covered almost 20,000 longshore workers at 29 ports up and down the West Coast, expired at 5 pm on July 1, 2014.

The PMA and union have already come to an agreement on some key issues, including jurisdiction over maintenance and repair of the truck chassis used to haul containerized goods to and from cargo terminals, the two sides remain apart on other issues, including wages and health & benefits.

AAPA Criticizes Proposed Port Funding Decreases

By Mark Edward Nero

The American Association of Port Authorities on Feb. 2 expressed disappointment over funding level and programmatic changes in federal port-related programs included in President Obama’s recently proposed fiscal year 2016 budget.

The proposed budget would reduce the US Army Corps of Engineers’ funding from the $2.33 billion appropriated last year to $1.95 billion for FY 2016. The budget request for the Corps’ coastal navigation construction program also drops for FY 2016, from $97 million to $81 million. If enacted, it would decline by 16 percent to its lowest level in over 10 years.

“The Corps of Engineers’ budget proposal falls well short of the waterside maintenance and modernization needs of this country,” Nagle remarked. “Our nation is at a critical point in maintaining our international competitiveness, and implementation of the FY2016 budget request would result in trade-related infrastructure losing further ground at a time when we are already behind many of our competitors.”

The proposed budget also calls for:
  • Increasing the competitive Transportation Infrastructure Generating Economic Recovery (TIGER) grants program to $1.25 billion per year, which is 150 percent more than last year’s $500 million appropriation.
  • Providing $18 billion over six years for a dedicated regional freight infrastructure investment program. The program would support multi-modal, corridor-based projects designed to eliminate existing freight transportation bottlenecks and improve efficiency.
  • Allowing $6 billion over six years to cover the subsidy cost of providing credit assistance for nationally or regionally significant transportation projects through the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. TIFIA leverages private sector investments in public infrastructure projects.

“We’re pleased to see and support the increased funding requested for surface transportation infrastructure, but deeply troubled by the proposed cuts to maintenance and modernization of federal navigation channels, the critical waterside infrastructure that connect our ports and nation to the world marketplace,” AAPA President & CEO Kurt Nagle said.

“If we can’t get the goods efficiently and competitively into and out of our country through seaports and waterside navigation channels,” he continued, “American manufacturers won’t be able to receive the materials and/or components they need, and they as well as US farmers, won’t be able to competitively export their products globally.”

Portland Terminal Says Productivity Hits New Low

By Mark Edward Nero

ICTSI Oregon, which operates Terminal 6, the only container terminal at the Port of Portland, says productivity at the facility has fallen “well below acceptable historical levels” because of labor strife.

“The ILWU has escalated its efforts against ICTSI Oregon, Inc. as of late, far beyond what other West Coast ports are experiencing,” ICTSI said in a prepared statement, saying the work slowdowns date back to June 2012.

In May 2012, ILWU labor was producing about 24.8 moves per hour, according to the terminal operator. However, in the last quarter of 2014, ILWU labor was producing only about 13.2 moves per hour – a roughly 47 percent reduction.

“This level of production is far below industry as well as Terminal 6 standards,” the company said.
The terminal operator is accusing the union of “deliberate and continuous work delays” since a jurisdiction battle between the ILWU, terminal operator and another union, the International Brotherhood of Electrical Workers, began to boil over in June 2012. The two unions were fighting over disputed jobs involving the plugging/unplugging and monitoring of refrigerated containers at Terminal 6.

The dispute has led to multiple container ships bypassing the port over the past two-and-an-half years in order to avoid the situation.

In December 2013, Oregon Gov. John Kitzhaber announced that the two-year dispute had been resolved and that the work was awarded to the ILWU, but the bad blood has continued.

In May 2014, a National Labor Relations judge ruled that the ILWU engaged in work slowdowns between September 2012 and June 2013 as part of the dispute – something the union denies.

And in the fourth quarter of 2014, numerous ports along the West Coast reported container traffic backlogs – something the Pacific Maritime Association, which represents terminal operators, attributes in part to labor slowdowns brought on by stalled contract negotiations.

Port of NY-NJ Sets Annual Volume Record

By Mark Edward Nero

The Port of New York and New Jersey, home to the busiest container port on the East Coast, set a new record for annual cargo volume in 2014, surpassing the previous record set in 2012, according to newly-released data.

During the year, the port handled 3.34 million cargo containers, an increase of 5.4 percent over the previous year and 4.1 percent more than in 2012, when the previous annual record was established.

By comparison, Puget Sound’s two biggest ports, in Seattle and Tacoma, moved a combined total of 3.4 million TEUs in 2014. The nation’s two busiest ports, in Los Angeles and nearby Long Beach, moved 8.3 million and 6.8 million TEUs, respectively, last year.

The record volumes for NY-NJ last year allowed the port to maintain its position as the busiest on the East Coast with nearly 30 percent of the total market share.

“Our port is continuing to reap the benefits of an uptick in the economy, which has resulted in the hiring of more dockworkers and economic growth for the region,” Port Authority Executive Director Pat Foye said. “We plan to continue our investments in the port in the coming years.”

During 2014, China remained the top import country serving the port, with 923,975 import containers. Following China were Germany (179,715 import containers) and India (176,621 import containers).

In 2014, there were 2,432 vessel calls in the port, down 2.3 percent from the 2,488 vessel calls in 2013. The fewer vessel calls illustrate that much of the cargo coming into the port is arriving in larger ships, a trend the port says it expects will continue.

Tuesday, February 3, 2015

LB Port Head Unveils ‘Energy Island’ Concept

By Mark Edward Nero

The Port of Long Beach has launched a technology advancement project code named ‘Energy Island’ that the port hopes will move it further toward its goal of becoming a zero emissions port, POLB Chief Executive Jon Slangerup revealed in his first State of the Port address on Jan. 29.

“Energy Island will transform the port into a showcase for advanced technologies that harness the sun, the wind, the sea and it will provide a self-sustaining, reliable energy system for the entire port of the future,” Slangerup said in his remarks, which were delivered in front of a crowd of about 800 at the Long Beach Convention Center.

Slangerup was appointed the port’s chief executive in July 2014 and this was his first time delivering a State of the Port speech, which is traditionally delivered in late January each year by the port’s top executive.

“We have five primary goals for Energy Island: first, we will advance the use of green power, both self-generated and purchased. Second, we will use self-generation to provide energy security and business resiliency,” Slangerup said.

“Third, we will reduce the demand on grid power and in return, feed surplus green power back into the grid,” he continued. “Fourth, we will be able to provide our customers, the terminal operators, with stable energy costs into the future.”

And finally, he said, Energy Island will provide “cost effective advanced fueling opportunities” throughout the port operations.

“Throughout the port, we envision a network of solar panels, fuel cells, clean fuel depots, wind turbines and other advanced technologies,” he revealed.

Slangerup said the port has been meeting with stakeholders in recent weeks to develop the Energy Island concept.

“We are committed to all of you, our customers, our stakeholders, to change the way the Port of Long Beach does business and indeed, the way our entire industry works together,” he told the attendees. “Your Port of Long Beach is well on its way to becoming the port of the future. The future starts now.”

LA, Long Beach Ports to Collaborate More

By Mark Edward Nero

The adjoining ports of Los Angeles and Long Beach, while remaining competitors, will work together more closely in the future on certain issues, the LA port’s executive director, Gene Seroka, said Jan. 30.

Seroka’s comments came during a first-of-its kind environmental summit hosted by the LA port. He revealed that he recently met with the mayors of Los Angeles and Long Beach, as well as his counterpart at the Port of Long Beach, Jon Slangerup.

“There will be some very interesting work happening beginning in February between the two ports,” Seroka said during the three-hour environmental summit, which was attended by, among others, local community leaders, representatives from the Port of Long Beach, key regulatory agencies, representatives from environmental organizations that are active at the two ports, representatives from private industry, local labor organizations and the ports’ terminal and railway operators.

The fact that the two San Pedro Bay ports collaborated on environmental initiatives in 2006 is essentially prologue to what comes next, Seroka said.

“We were in lockstep nearly 10 years ago with the Clean Air Action Plan. There will be more work that we do together, everything except pricing terms; there will continue to be a healthy competition around that,” he revealed. “There is some work that will start happening in the month of February with the ports of Long Beach and Los Angeles working in partnership, from the area of marketing to legislation, environmental causes, safety & security, as well as the supply chain.”

“There will be more to come and our mayors will lead the charge in these areas, but I look forward to a new day in working together and I think we can collectively move the ball forward in a great manner,” he said. The San Pedro Bay Ports Clean Air Action Plan mapped out a strategy to reduce or prevent pollution from the ships, trucks, locomotives, tractors and cranes that move cargo. Components include regulations and incentives to get vessel and vehicle owners to reduce air emissions.

Last week’s environmental summit, held at Banning’s Landing Community Center in Wilmington, attracted dozens of stakeholders. Among the topics were future programs and potential initiatives that could help ensure balanced and sustainable growth at the port, which is America’s largest and busiest seaport, but for decades has almost been one of the country’s largest fixed-station emitters of air pollution. The meeting consisted of a roundtable discussion with invited panel participants.

“The next step of our Clean Air Action Plan will raise the bar to historic heights,” Seroka said without giving away any details. “It will talk about things that have never been contemplated before.”

POLB Projects Progressing, Chief Executive Says

By Mark Edward Nero

The two most high-profile multi-year construction projects currently ongoing at the Port of Long Beach are poised to have significant amounts of progress complete by the end of 2015, the port’s chief executive said during the annual State of the Port address on Jan. 29.

One of the projects is the Middle Harbor Redevelopment Project, a ten-year redevelopment plan consisting of the combining of two aging shipping terminals, Pier E and Pier F, into one modern terminal for the purpose of improving cargo-movement efficiency and reduction of environmental hazards. Preliminary work on the project began in the spring of 2011 and in April 2012 Orient Overseas Container Line signed a 40-year, $4.6 billion lease with the port to operate the 300-acre terminal along with its subsidiary, Long Beach Container Terminal. LBCT has occupied Pier F since 1986.

“By summer (of 2015), we will reach a major milestone for this $1.3 billion project with completion of the first phase,” Slangerup said. “By fall, our partners OOCL and Long Beach Container Terminal can open Middle Harbor for business.”

Completion of Phase 1 is expected to increase overall container capacity at the port by 10 percent while at the same time reducing air emissions and ushering in an era of all-electric terminal operations, Slangerup said.

The project is expected to be complete by 2020. When both phases are complete, Middle Harbor will have the capacity to handle three million TEUs, which would increase the port’s overall container-moving capacity by 20 percent.

“If Middle Harbor was a standalone port, it would rank as the country’s fourth-busiest port,” Slangerup said. “It’s a massive thing.”

The other project updated was the construction of a replacement for the Gerald Desmond Bridge, a $1.3 billion project that intends to replace the existing 47-year-old bridge that traverses the port and Terminal Island, with a taller, wider – but still currently unnamed – bridge.

“Nearly a third of the bridge’s 351 piles have been constructed and the rest will be done this year,” he said. “The towers will rise more than 500 feet into the air, making the bridge the city’s tallest structure. And besides adding to the skyline, the new bridge will increase capacity by about one third, speeding travel for thousands of our daily commuters as well as improving conditions for trucks that today carry 15 percent of America’s imports.”

The bridge is expected to be completed between by mid-2018.

K-Line Exec Pleads Guilty to Price Fixing

By Mark Edward Nero

An executive with Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) has pled guilty and been sentenced to 18 months in a US prison for his involvement in a conspiracy to fix prices, the US Department of Justice announced Jan. 30.

Also among the charges to which Hiroshige Tanioka pled guilty was rigging bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere.

According to the one-count felony charge filed in US District Court for the District of Maryland in Baltimore, Tanioka, who was at various times an assistant manager, team leader and general manager in K-Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere.

Roll-on/roll-off cargo (ro/ro) is non-containerized cargo that can be both rolled onto and off an ocean-going vessel. Examples include cars, trucks and construction and agricultural equipment. Tanioka participated in the conspiracy from at least as early as April 1998 until at least April 2012, according to the Justice Dept.

“For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” Bill Baer, the Assistant Attorney General for the Department of Justice’s Antitrust Division, said in a Jan. 30 statement. “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable.”

The sentence was the first to be imposed against an individual in the division’s ocean shipping investigation but previously, three corporations had agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Tanioka’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.

Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy.