Searchable Goods Movement Timeline

Welcome to the METRANS Goods Movement Timeline. This is a searchable timeline of activities tied to goods movement, logistics and international trade based upon items from the popular press.

Given our location and the importance of this region as an international trade gateway, many of the entries pertain to Southern California. We do however draw from state and national press as well. Some articles' links may have expired, or you may have to pay a fee or register on the Web site where they originally appeared to access the complete article. Our goal however is to provide the researcher with enough information to track significant events over time as they have occurred in key areas like legislation, finance, and security.

This timeline grew out of timelines initially developed for METRANS research projects in the area of goods movement. Earlier entries (before 2005) were therefore not prepared with a searchable database in mind and will be less detailed. We hope, however, that they remain a useful resource.

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Aug 04, 2017

Dockworkers union ratifies contract extension, easing fears of another slowdown

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The union that represents dockworkers along the West Coast have ratified a three-year contract extension, a move that will likely quell fears of a work stoppage or slowdown in 2019 when the contract was originally set to expire.

The International Longshore and Warehouse Union announced Friday that 67 percent of its members, which include dockworkers at the ports of Long Beach and Los Angeles, approved the extension through July 1, 2022.

“The rank-and-file membership has made their decision and expressed a clear choice,” ILWU International President Robert McEllrath said in a statement Friday. “During the past year we saw a healthy debate and heard different points of view, with concerns raised by all sides. The democratic process allowed us to make a difficult decision and arrive at the best choice under the circumstances.”

The news comes nearly three years after contentious negotiations resulted in a major backlog of cargo ships outside the harbor.

A breakdown in contract talks between the ILWU and the workers’ employers, represented by the Pacific Maritime Association, slowed cargo movement and cost the economy billions of dollars as retail inventories were held up on the docks.

It also sullied the reputation of the nation’s busiest seaports, Los Angeles and Long Beach, which was already losing market share to East Coast hubs.

The contract extension will raise wages, maintain health benefits, and increase pensions, the union said.

The ILWU represents roughly 20,000 workers at 29 ports across California, Oregon and Washington.

The unusual early vote came amid pressure from manufacturers, retailers and other local, regional and national groups dependent on the ports to move everything from flat-screen TVs from China to Central California grain for export as consumer demand for fast, cheap products continues.

“With this contract extension, the West Coast waterfront has a tremendous opportunity to attract more market share and demonstrate that our ports and our workforce are truly world-class,” Pacific Maritime Association President James McKenna said in a statement last week.

Online Edition

The union that represents dockworkers along the West Coast have ratified a three-year contract extension, a move that will likely quell fears of a work stoppage or slowdown in 2019 when the contract was originally set to expire.

The International Longshore and Warehouse Union announced Friday that 67 percent of its members, which include dockworkers at the ports of Long Beach and Los Angeles, approved the extension through July 1, 2022.

Aug 10, 2017

Port of LA reports busiest July ever, sets record for Western cargo hub

Online Edition

The Port of Los Angeles announced Thursday that it recorded its busiest July ever, with container volumes climbing by 16 percent compared to July 2016 volumes.

A total of 796,804 20-foot-equivalent units came through the Port of Los Angeles, the busiest July in the port’s 110-year history and coming on the heels of the news that it set a 12-month shipping record for a Western Hemisphere port during the recent fiscal year.

The calendar year also is expected to break records, as so far container volumes are 9.5 percent ahead of 2016, when the port moved a record-breaking 8.8 million TEUs.

“As we strive to maintain our competitive edge with these record volumes, it’s important to acknowledge the Pacific Maritime Association and the good men and women of the International Longshore and Warehouse Union who just extended their contract with terminal operators until 2022,” said Gene Seroka, executive director of the Port of Los Angeles.

“The certainty that comes from this decision builds further long-term confidence in our supply chain as we continue to focus on superior infrastructure, innovative leadership and extraordinary customer service.”

Online Edition

The Port of Los Angeles announced Thursday that it recorded its busiest July ever, with container volumes climbing by 16 percent compared to July 2016 volumes.

A total of 796,804 20-foot-equivalent units came through the Port of Los Angeles, the busiest July in the port’s 110-year history and coming on the heels of the news that it set a 12-month shipping record for a Western Hemisphere port during the recent fiscal year.

Aug 08, 2017

Labor peace a win for L.A., Long Beach ports — and beyond

Online Edition

Retailers, shippers and consumers breathed a sigh of relief as a first-of-its-kind contract extension was approved by dockworkers at all West Coast ports.

The extension, ensuring labor peace at 29 ports in California, Oregon and Washington until 2022, was hailed by management and union officials who wanted to avoid labor strife that devastated the economy in 2014-15.

Nobody wanted to see a repeat of the problems that were experienced two years ago when contract talks between the International Longshore and Warehouse Union and the Pacific Maritime Association broke down. West Coast ports were crippled with a cargo slowdown that came during the holiday season. Especially hard hit was the Los Angeles and Long Beach megaport complex, which is considered the linchpin of trade from Asia into the United States, moving 37 percent of all the nation’s imports. The inability to get a contract slowed cargo movement and cost the economy billions of dollars as retail inventories were held up on the docks and deliveries were delayed throughout the nation.

An agreement was finally reached in February 2015 after President Barack Obama sent his labor secretary to join the negotiations. The agreement, signed almost eight months after the prior contract had expired, was due to expire in 2019.

The Pacific Maritime Association, which represents terminal operators and shippers who hire ILWU workers, proposed talks on a contract extension to avoid another slowdown. Sixty-seven percent of union workers approved the three-year extension that covers 20,000 full-time and part-time workers from Bellingham, Wash., to San Diego. It is the first contract extension of its kind in ILWU history.

It is a win for everyone involved, from consumers wanting products delivered on time to port officials and operators who sorely need labor stability as global competition intensifies. And union members receive a generous compensation package, including pay raises of 3.1 percent each year of the extension.

With this potential thorn out of the way, the Ports of Los Angeles and Long Beach can concentrate now on finding ways to deliver value and efficiency for U.S. importers and exporters as competion heats up.

Online Edition

Retailers, shippers and consumers breathed a sigh of relief as a first-of-its-kind contract extension was approved by dockworkers at all West Coast ports.

The extension, ensuring labor peace at 29 ports in California, Oregon and Washington until 2022, was hailed by management and union officials who wanted to avoid labor strife that devastated the economy in 2014-15.

Jul 28, 2017

Dockworkers close to reaching early deal on contract, bringing relief to retailers, shippers

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West Coast dockworkers are close to approving a contract extension nearly two years before it expires, a move hailed by retailers and shippers who want to avert labor strife that could hurt the wider economy.

On Friday, the International Longshore and Warehouse Union said preliminary results from a vote taken earlier this month showed 67 percent of their members support extending their current five-year contract until 2022.

The news comes nearly three years after contentious negotiations resulted in a major backlog of cargo ships outside the harbor.

“Nobody wants to see a repeat of the problems that were experienced in 2014-2015, and this remarkable sign of good faith on the part of both labor and management ensures that such a situation will be avoided,” said Jon Gold of the National Retail Federation.

A breakdown in contract talks between the ILWU and the Pacific Maritime Association during those years slowed cargo movement and cost the economy billions of dollars as retail inventories were held up on the docks.

It also sullied the reputation of the nation’s busiest seaports, Los Angeles and Long Beach, which was already losing market share to East Coast hubs.

“There was no shortage of differing views in the year-long debate leading up to this vote and members didn’t take this step lightly,” said Robert McEllrath, ILWU International president.

The current agreement expires July 1, 2019, but would be extended until July 1, 2022, if the ratification is approved as expected.

The contract ensures raises in wages, maintains health benefits and increases pensions.

Union officials would not say how many members voted or what percentage of ballots had been counted, but they expect to release many of those details when official results are reported on Aug. 4.

The unusual early vote came amid pressure from manufacturers, retailers and other local, regional and national groups dependent on the ports to move everything from flat-screen TVs from China to Central California grain for export as consumer demand for fast, cheap products continues.

Considered the linchpin of trade from Asia, the Los Angeles and Long Beach ports moved 37 percent of all the nation’s imports .

“With this contract extension, the West Coast waterfront has a tremendous opportunity to attract more market share and demonstrate that our ports and our workforce are truly world-class,” said Pacific Maritime Association psresident James McKenna issued this statement:

Online Edition

West Coast dockworkers are close to approving a contract extension nearly two years before it expires, a move hailed by retailers and shippers who want to avert labor strife that could hurt the wider economy.

On Friday, the International Longshore and Warehouse Union said preliminary results from a vote taken earlier this month showed 67 percent of their members support extending their current five-year contract until 2022.

Jul 29, 2017

Sri Lanka, China sign long-delayed $1.5 billion port deal

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COLOMBO, Sri Lanka >> Sri Lanka’s government on Saturday signed a long-delayed agreement to sell a 70 percent stake in a $1.5 billion port to China in a bid to recover from the heavy burden of repaying a Chinese loan obtained to build the facility.

The agreement comes after a nearly six-month delay since the signing of the framework deal, which immediately drew public criticism and protests.

The document was signed between the government-run Sri Lanka Ports Authority and the state-run China Merchants Port Holding Co. in the capital, Colombo, in the presence of senior government officials from Sri Lanka and China. According to the agreement, the Chinese company will invest $1.12 billion in the port, which sits close to busy east-west shipping lanes. Under the original framework agreement, an 80 percent stake would have been sold to China.

Two local companies whose shares will be split between the Chinese enterprise and the Sri Lanka Ports Authority will be set up to handle the port’s operations, security and services. The Chinese company will be responsible for commercial operations while the Sri Lanka Ports Authority will handle security. The lease period is 99 years.

The port, built with a Chinese loan during the administration of former President Mahinda Rajapaksa, is seen as a white elephant because it has failed to become financially viable since it began operations in 2011.

Before they were elected in 2015, opposition parties had criticized the project, but the government later sought help from China to make the port viable because of its severe underperformance and the heavy burden of loan repayment.

The port’s annual loan repayment commitment stands at $59 million, and by the end of 2016 the port had suffered a loss of $304 million, according to the government.

The port is part of Beijing’s so-called string-of-pearls plan for a line of ports stretching from its waters to the Persian Gulf. Rajapaksa relied heavily on China for infrastructure projects. During his administration, China provided loans for an airport, sea port, highways and power plants, and became the largest investor in Sri Lanka.

China’s influence in Sri Lanka makes neighboring India anxious because it considers the Indian Ocean region to be its strategic backyard. President Maithripala Sirisena has been trying to balance both Asian giants.

Sri Lankan officials have repeatedly reiterated that the port’s security will be handled by Colombo in an attempt to allay the fears that the port could be used by Chinese as a military hub.

The agreement has ignited protests inside the country too and in January, hundreds of farmers and opposition supporters protested the plan to lease the port, saying the proposed partnership was akin to a sellout of the country.

Online Edition

COLOMBO, Sri Lanka >> Sri Lanka’s government on Saturday signed a long-delayed agreement to sell a 70 percent stake in a $1.5 billion port to China in a bid to recover from the heavy burden of repaying a Chinese loan obtained to build the facility.

The agreement comes after a nearly six-month delay since the signing of the framework deal, which immediately drew public criticism and protests.

Jul 30, 2017

Are new-tech trucks ready to replace diesel, keep California’s pollution-fighting promise?

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The race to replace Southern California’s biggest polluter is on. It’s going to take science, time, money — and maybe an assist from Elon Musk.

At the ports of Los Angeles and Long Beach, an ambitious $14 billion clean-air plan calls for the elimination of dirty-burning diesel equipment by 2035 — $9 billion just to purchase and deploy trucks.

It’s not going to be easy or cheap to replace the iconic workhorse of the region’s economy. About 16,000 diesel trucks tote tons of cargo — nearly 40 percent of all goods imported into the country — from the ports to the warehouses and deployment centers of the Inland Empire.

“It’s going to be extremely expensive and the technology is not there,” Gene Seroka, executive director of the Port of Los Angeles, told his commissioners last week.

The plan relies on heavy-duty trucks producing zero and near-zero emissions. But that technology isn’t yet ready to carry the full burden of today’s goods movement, many say.

And already there are squabbles over which technology will be the best fit:

• Electric: These trucks promise to be robust and truly emission-free, but a wary trucking industry won’t believe a practical electric big-rig — one capable of towing 80,000 pounds of Reeboks, with a range beyond 200 to 300 miles, and a battery that can be easily recharged — until they see it.

• Natural gas: This technology is closer to ready than any of its competitors. But they don’t burn quite as clean as electric vehicles. And some truckers remain bitter about a disappointing past state program during which LNG trucks underperformed, despite considerable expense and hype.

• Hydrogen cells: This model is the furthest from full deployment, but is considered to have broad potential for range, quick fill-ups and clean water as its only byproduct. But, like your family SUV, they have a fuel tank to fill, so for these trucks to take to the road, a mammoth hydrogen-station infrastructure would have to pop up, too.

• Hybrid: A truck powered by both natural gas and electricity — or some other combination — might help the industry hit the sweet spot. This would resolve some of the sticky problems that each of the individual technologies pose, but would likely not achieve emissions-free status.

All of these solutions need to step up technologically, though natural gas-powered trucks are closest to that finish line.

Why not start there? Some are afraid to spend money on an “almost zero” solution that runs on a fossil fuel, only to replace it when cleaner options advance technologically.

Whichever new-tech trucks hit the road, experts agree that all promise to be much more expensive than their diesel-drinking peers — at least for now. Mass production of vehicles in the decades to come is expected to slash today’s prices.

The riddle doesn’t have to be solved today, but the clock is running and tighter emissions standards loom on the horizon.

The romance of the open-road trucker behind the wheel of a hulking diesel big-rig is undeniable.

Perhaps the most common vehicle in American industry, they haul tons of cargo along the nation’s transit corridors. They are durable, reasonably cheap to run and easy to maintain and repair, their boosters declare.

An owner-operator can snag a bright-shiny new one for about $150,000 or a decent-running used model for $40,000 to $80,000.

Unfortunately, that iconic diesel can also leave behind a trail of smog-forming nitrogen oxide and lung-searing diesel-particulate matter, linked by researchers to asthma, various other respiratory ailments, and even cancer.

Diesel emissions in the logistics industry cause more than $20 billion in health impacts each year, according to the American Lung Association.

Though much science has been devoted to cleaner-running diesels, they still top the hit list for many environmentalists. So most plans for cleaning the nation’s air — especially along Southern California’s cargo corridor — include the deliberate disappearance of the diesel.

In the meantime, some fear smaller trucking companies forced to live up to the new standards might well be rocked financially.

“Near-zero emissions can be costly and limits some small fleets’ ability to get into the equipment,” said Matt Schrap, president of California Fleet Solutions, a transportation consulting firm. “But even more sophisticated, higher cost standards like zero-emission vehicles could price them out of the market,”

The twin ports of Los Angeles and Long Beach — and the state’s air-quality regulators — have said it doesn’t matter how diesel is phased out, but it has to go. And they are willing to pour millions of dollars, maybe eventually billions, into incentive and test programs to assure it.

The air district has spent $40.9 million for demonstration projects showcasing 69 battery-electric, plug-in hybrid/electric and fuel-cell trucks.

Over the past seven years, the district also subsidized 6,000 big rig trucks that run on natural gas or cleaner-burning diesel, including 2,000 serving the port.

And with the mayors of Los Angeles and Long Beach calling for zero-emission ports, Seroka and others believe they can get there with the help of some deep-pocketed companies willing to invest in and grow the burgeoning market.

L.A. port chief Seroka worries that many of the major automotive players are loading their research dollars into autonomous vehicles rather than clean technology.

“We are going to bring the companies here and we are going to show them that they have a customer base ,” Seroka said, “that is worthy of consideration to invest in this technology.”

Major West Coast ports have united to send out an open request to engine manufacturers about current technology, hoping to signal that the region is open for the cleaner-burning business. They hope that the images of a hungry market will cut prices sooner rather than waiting years for the technology to become cheaper as production expands.

Proponents of natural gas and other fuels that burn cleaner than diesel argue their technology is ready to roll.

But some environmentalists counter that it would be better to invest in zero-emissions trucks later rather than spend on almost-zero-emitting vehicles now.

“It’s frustrating because the warring factions have legitimate issues and points,” said Joe Lyou, president and CEO of Coalition for Clean Air and a member of the South Coast Air Quality Management District board.

Lyou eventually would like to see all zero-emission trucks on the road some day — although he’s pleased to have low-emitting natural gas vehicles taking up lanes now.

To be fair, natural gas-powered vehicles do cut air pollution radically. And next year, the heavy-duty natural-gas engines are expected to get certified by the state’s air regulators, making them easier to purchase widely. Their engines emit 90 percent less of the smog-forming nitrogen oxide than even the cleanest diesel trucks. Plus, there’s no diesel particulate matter, a toxic responsible for many of the trucks’ damaging health effects.

“There is not a one-size-fits-all solution for the entire basin,” said Fred Minassian, who works on research and development at the air district. “We cannot wait five or 10 years or so for the perfect electric fuel-cell to be a fit for all.”

Natural gas vehicles are clean, getting cheaper and are more plentiful each day, its proponents say. The trucks that run on compressed (CNG) or liquified (LNG) natural gas are pricier than diesel, costing as much as $225,000, but they’re cheaper than the next wave of other zero-emissions options, experts say.

And don’t expect a shortage of natural gas, they say. There’s so much of it, the industry sells more to overseas buyers each year. Since 2015, seven new LNG facilities have launched production, according to Forbes magazine, and another 15 are under construction.

Increasingly, the fuel is what the industry calls renewable, with more produced from waste at landfills and dairy farms.

Nonetheless, it’s still considered a fossil fuel. And it shouldn’t shift focus away from pollution-free technology, some environmentalists say.

“This notion that we can further our dependency on fossil fuels and we can get to long-term air quality is wrong,” said Evan Gillespie, who directs the Sierra Club’s campaign for clean energy.

“One of the things you do when you invest (in natural gas) is you lock in a fossil fuel for a long time,” Gillespie said. “We can’t afford to do that.”

Many in the trucking industry just don’t trust natural-gas vehicles.

“There is a huge stigma with natural gas,” said Weston LaBar, executive director at Harbor Trucking Association.

A decade ago, the port promoted them as the best alternative to diesel — and they partnered with AQMD to sink millions of dollars into subsidizing LNG-fueled trucks as part of their first clean-air plan.

Those trucks soon proved to be a bust, truckers say. Amid all the spending and environmental hype, the trucks developed mechanical problems and weren’t powerful enough to carry the heaviest of loads.

“When natural gas was imposed by the ports as part of the first clean-trucks program, the technology wasn’t ready for the job it was supposed to do and many drivers had bad experiences,” LaBar said. “They have no interest in using it again.”

But, he said, “natural gas works.”

The biggest hurdle, he said, is the stigma associated with that first program. “They have to win back the hearts and minds of the trucking community,” LaBar said.

You don’t have to sell environmentalists on electric trucks.

With the roads packed with fuel-cell hybrid family cars and Tesla’s vow to reinvent the affordable rechargeable with the arrival of the Model 3, electric vehicles are no longer an impractical, however responsible, dream.

Electric trucks, however, aren’t as ready.

The ports of Los Angeles and Long Beach successfully use electric-powered forklifts and cranes, but electric-powered vehicles can’t be run for more than 140 miles without a charge.

Also, the heavier the loads, the smaller the range. At this point, a truck hauling 80,000 pounds can only go 80 miles.

Electric big-rigs range in price from $300,000 to $400,000.

Charging stations for family cars are growing increasingly common. But armies of electric trucks would call for more stations and more power lines. The infrastructure to power up trucks would prove pricey, especially along remote roadways. And worse, they can’t run a 24-hour cycle.

However, some believe battery exchanges — swapping out a fully charged battery for a spent one — could eliminate that problem.

The landscape is changing rapidly.

Iconic heavyweights in the truck industry and startups alike are introducing one advance after another.

And Musk — with his own brand of enigmatic chutzpah — promises to single-handedly reinvent the electric truck industry when he reveals his company’s Tesla Semi in September. Musk owns rocket builder SpaceX in Hawthorne and operates a Tesla design center in the city.

His truck rides like a sports car, he says.

In the end, hydrogen-fueled trucks may prove a superior option to electric because there’s no charging lag time.

When the liquid fuel is combined with air in the fuel cell, it creates electricity to power the vehicle and releases only clear H2O.

But hydrogen trucks are the most costly of the clean-burning options — about $480,000 to $640,000 per vehicle. These trucks are furthest away from mass production, which is expected to drive down vehicle cost.

They run on hydrogen, often derived from compressed natural gas. Yes, that’s a fossil fuel, but it can also be created by a solar-energy process.

“It looks promising from the standpoint that it’s proving reliable and efficient,” said Frank Falcone, vice president of powertrain engineering at Transpower, a company that refits trucks to run on clean-burning energy. The Escondido-based firm just commissioned its first version of the hydrogen fueled big rig and is working toward commercialization.

However these technologies play out, it’s possible that hybrid versions of each — electric-battery-plus-liquid-fuel trucks, like a large-duty version of the Toyota Prius or other family vehicle — could prove popular.

“We don’t know what technology is going to become dominant or we wouldn’t be doing all of this,” he said, “but I am confident that electrification will be part of the final solution.”

 

Online Edition

The race to replace Southern California’s biggest polluter is on. It’s going to take science, time, money — and maybe an assist from Elon Musk.

At the ports of Los Angeles and Long Beach, an ambitious $14 billion clean-air plan calls for the elimination of dirty-burning diesel equipment by 2035 — $9 billion just to purchase and deploy trucks.

Aug 01, 2016

Has US truck driver employment peaked?

Online Edition

U.S. truck drivers were hired at the fastest rate in 10 years in 2015, with the total number of drivers closing in on the pre-recession peak set in 2007, according to the U.S. Bureau of Labor Statistics.

Efforts to boost driver pay slowed, however, as the BLS average annual wage for heavy-truck drivers rose 1.4 percent to $42,500 in 2015, about a $570 difference, after rising 2.4 percent in 2014.

This year’s statistics, when released, likely will tell a different story, at least about driver numbers.

Truck driver hiring reached a plateau by late 2015 and slipped in the first half of 2016, monthly BLS data show. The driver employment level that was reached in 2015 might be the top of trucking’s current hiring cycle.

The number of heavy-truck drivers employed across various industries rose 3.3 percent in 2015 to 1,678,280, according to the annual occupational data from the BLS. The previous peak in the BLS numbers was 1,693,590. The gap between the two numbers is less than 1 percent.

The 3.3 percent increase, which represents nearly 53,000 drivers, followed a 2.5 percent gain in 2014. Since 2010, the number of tractor-trailer drivers has risen 14.4 percent, the annual occupational data show. The annual numbers, based on different BLS employment data than the monthly payroll survey the agency uses in its employment situation report, are higher than the monthly figures and also show a larger gap between the pre-recession peak number of truck drivers and today’s driver pool.

However, the monthly BLS numbers also are much more current, and they show that the surge in hiring that put more drivers behind the wheel in 2014 and early 2015 has ebbed in 2016.

In June, the number of employees on for-hire carrier payrolls dropped 0.4 percent on a seasonally adjusted basis, both from May and from a year ago, BLS data show. That pushed the JOC Trucking Employment Index down.

The year-over-year drop in the number of trucking employees reported by the BLS in June was the first since July 2010, when trucking hiring began to rise after a three-year decline.

The number of U.S. tractor-trailer drivers fell 12.4 percent from 2007 through 2010, hitting bottom at 1,466,740, the lowest number of truck drivers reported by BLS since 1998.

The annual data show the current recovery cycle in trucking hiring has run five years. The previous cycle, which began in 2002, lasted six years, the BLS data indicate.

The gap between the pay received by truck drivers and other U.S. workers widened last year, as the average BLS tractor-trailer driver wage rose 1.4 percent, compared with a 2.3 percent increase for the average U.S. worker. That raised the gap between the average truck driver wage and the average U.S. wage slightly to 12 percent, an analysis of BLS data show.

The BLS occupational employment statistics count drivers of Class 8 tractors, but not drivers of medium- and light-duty trucks or independent drivers who own their businesses.

If all of those drivers were counted, the total driver population would be much higher. The American Trucking Associations estimates there more than 3 million truck drivers in the U.S.

Online Edition

U.S. truck drivers were hired at the fastest rate in 10 years in 2015, with the total number of drivers closing in on the pre-recession peak set in 2007, according to the U.S. Bureau of Labor Statistics.

Efforts to boost driver pay slowed, however, as the BLS average annual wage for heavy-truck drivers rose 1.4 percent to $42,500 in 2015, about a $570 difference, after rising 2.4 percent in 2014.

This year’s statistics, when released, likely will tell a different story, at least about driver numbers.

Aug 01, 2016

Liners up idle tonnage to strengthen peak-season pricing

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Container shipping lines are idling vessels of all sizes during the current peak shipping season in a bid to raise load factors — and boost flagging freight rates — in an oversupplied market, according to Drewry Shipping Consultants.

“In an ideal world, all ships, airplanes and trucks should be fully utilized during the peak shipping season, but this is definitely not what is happening this year in container shipping,” the London-based maritime analyst said.

The recent decision by several container line alliances to suspend two trans-Pacific loops at the start, rather than the end of the peak season, was one of the first signals that “something exceptional” was happening in the market. That first round of cuts spurred fears of rolled cargo from shippers that signed historically low contract rates this season.

More than 300 vessels with a combined capacity of more than 800,000 twenty-foot-equivalent units were idle in early July, supposedly the start of the Asian export peak season. In the previous two Julys, less than a quarter of this capacity was idled.

A combination of low freight rates and muted demand on the trans-Pacific must have played a part in the decision of carriers to lay up ships in July, Drewry said.

“But we also speculate that carriers are trying not only to park unused capacity, but also to bring spot rates up by increasing load factors on remaining active ships.”

The G6 alliance’s decision to drop the CC1 trans-Pacific service idled five of six ships of about 6,600 TEUs — one vessel was redeployed on another service. The Ocean Three Alliance’s suspension of its Manhattan Bridge service in mid-July idled nine vessels with an average capacity of 4,000 TEUs.

The reductions may be having some impact as the trans-Pacific spot rate for shipping a 40-foot container from Shanghai to the U.S. last week jumped 12 percent to the East Coast and rose 2 percent to the West Coast.

However, “As deliveries of new ships continue, carriers are starting to run out of options of how to deploy even their largest ships in today’s oversupplied market,” Drewry said.

An increasing number of 4,000-TEU to 5,000-TEU Panamax ships are now idle following the opening of the expanded Panama Canal.

Perhaps more surprisingly, even the small ship segment below 3,000 TEUs is seeing a trend towards inactivity, Drewry said. This is partly due to intense competition and overcapacity in the intra-Asia market, where a high proportion of smaller vessels are employed.

The unemployment rate during the peak season is about 4 percent, up from just 1 percent a year ago, despite the increase in demolitions.

“This does not bode well for asset utilization during the peak season.”

Online Edition

Container shipping lines are idling vessels of all sizes during the current peak shipping season in a bid to raise load factors — and boost flagging freight rates — in an oversupplied market, according to Drewry Shipping Consultants.

“In an ideal world, all ships, airplanes and trucks should be fully utilized during the peak shipping season, but this is definitely not what is happening this year in container shipping,” the London-based maritime analyst said.

Jul 29, 2016

LA-LB terminals temporarily suspend chassis gate fee

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Marine terminal operators in Los Angeles-Long Beach have suspended for 30 days the imposition of a $5 chassis gate fee on chassis moves into and out of their facilities that was to begin Monday, but it looks like the 13 terminal operators are determined to begin charging the fee by Sept. 1.

Although $5 does not sound like a lot of money, chassis providers, known as intermodal equipment providers, estimate that the fee will result ultimately in a total additional cost of $29 million a year for beneficial cargo owners in the largest U.S. port complex.

Terminal operators, on the other hand, say they store the chassis on expensive waterfront land, pay longshoremen for stacking and unstacking chassis in their yards and provide IEPs with information on each chassis transaction that the IEPs in turn use to bill their customers, and the IEPs until now have been receiving these services from the terminals for free.

The West Coast Marine Terminal Operators Agreement 45 days ago notified the three major chassis providers, Direct Chassis Link, TRAC Intermodal and Flexi-Van, that effective Aug. 1 the terminals would begin levying the fee in Southern California. WCMTOA then filed a formal notice with the Federal Maritime Commission 30 days in advance of the implementation date, as required by the commission.

However, “at the 11th hour,” two of the IEPs objected to the fee, said John Cushing, president of PierPass Inc., who also handles WCMTOA matters since the membership is the same. He would not say which of the IEPs objected, and the three companies did not immediately respond to an inquiry on the matter.

Chassis, while a vital piece of the equipment in the transportation chain, until several years ago were never an issue at U.S. ports. Shipping lines in the U.S. since the dawn of containerization in the 1960s provided chassis to BCOs or their truckers when the cargo booking was made. The U.S. was the only market in the world where the lines provided chassis, in effect for free, to their customers.

In an attempt to mitigate the large costs involved in owning, repairing and managing chassis, the shipping lines several years ago began phasing out their ownership of the equipment, and eventually they sold most of their chassis to the IEPs or to trucking companies. The IEPs now bill cargo owners for the use of the chassis.

As the launch date for the $5 chassis gate fee drew closer, IEPs and the trucking companies in Los Angeles-Long Beach that lease their chassis began to push back against the new fee, even though neither the IEPs nor the truckers should ultimately end up actually paying the fee. In the normal course of such transactions, the marine terminal should charge the $5 fee to the IEP, the IEP will pass it on to the trucker and the trucker will pass it on to the BCO.

Cushing said Friday the member companies of WCMTOA are responding to the complaints from the IEPs by suspending the fee for 30 days. While no final decision has been made, the indication from WCMTOA’s members is that no further extensions will be granted, Cushing said.

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Marine terminal operators in Los Angeles-Long Beach have suspended for 30 days the imposition of a $5 chassis gate fee on chassis moves into and out of their facilities that was to begin Monday, but it looks like the 13 terminal operators are determined to begin charging the fee by Sept. 1.

Jul 21, 2017

Port clean-air plan risks rocking economic boat: Guest commentary

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Since 2006, when the first Clean Air Action Plan was jointly adopted by the ports of Los Angeles and Long Beach, significant emissions reduction has occurred in San Pedro Bay. The latest Air Quality Report Card shows sulphur oxides emissions from ships is down 97 percent and diesel particulate matter from equipment at marine terminals is down 86 percent over 10 years.

As the new draft CAAP revision highlights, “These reductions are a testament to the CAAP’s cutting-edge strategies and the collaborative approach taken with the regulatory agencies and our industry partners to meet shared goals.”

With past progress in mind, we at the Pacific Merchant Shipping Association agree that further emissions and greenhouse gas reductions can and must occur. PMSA supports a revision that creates a smooth transition to zero-emissions technology while boosting both ports’ growth and recovering their lost market share, resulting in both a cleaner and more competitive San Pedro Bay port complex.

Unfortunately, the ports’ proposed revisions, released earlier this week, do not lay out the path to a win-win on the economy and the environment. Instead, their proposals focus on aggressive environmental mandates with no measure of cost-effectiveness, no comprehensive financial feasibility analysis, no funding plan and no business rationale for these goals.

One of these mandates is full zero-emissions electrification of all marine terminal equipment by 2030.

The only substantive cost estimate of moving to zero-emission technologies across San Pedro Bay is the Moffatt & Nichols study commissioned by PMSA. That analysis put the additional capital costs of moving to the only mature zero-emission technology available today at $16 billion to $28 billion statewide over 30 years, plus tens of billions more in additional operating costs. And that doesn’t include infrastructure costs outside the marine terminal gates.

But the proposed CAAP revision estimates that the cost to replace existing equipment with zero-emissions equipment will cost only $1.8 billion and that port-side infrastructure will be $2 billion.

To get such dramatically under-estimated costs, the CAAP revision is putting all of its eggs in one basket: unrealistically assuming that non-existent electrified cargo handling equipment technology will be developed, tested, work as planned and be affordably priced and produced in a quantity to meet the ports’ rigid timelines.

That’s a big assumption with no margin for error and no Plan B if and when something goes wrong.

What’s more baffling is that this speculative exercise on technology and costs excludes the successes of commercially available automated electrified zero-emissions equipment in use at ports today. But, apparently because it is automated technology, the CAAP ignores it as an option.

Regardless of the specific equipment costs, the CAAP doesn’t ask the baseline question of whether either the ports or their customers have the revenue available to pay for these dramatically higher equipment and infrastructure costs in a highly competitive market.

Nor does it consider that terminal operators don’t have the luxury of the CAAP’s “wait, see and hope” approach to new technology. If these aggressive timelines are to be met, plans need to be developed, permits approved and financing arranged, and construction needs to occur almost immediately. All of the above needs to be accomplished while terminals continue to operate.

If done poorly, the ports run the real risk of only becoming less competitive.

During the past 10 years, the ports’ “growth” has been non-existent. Just this past month, their combined volume equaled what it was in 2006. Without a strategy to grow cargo volumes and then to utilize this growth to finance the most efficient, and cost-effective transition to a zero-emissions San Pedro Bay, the ports’ CAAP is simply incomplete.

We have one shot to get this right. If we miss the opportunity to balance continued environmental progress with economic competitiveness policies that increase the volume of goods moving through the ports, then the region’s economy, businesses and residents will suffer, and the emission reductions that are important to communities surrounding the ports may prove illusive.

PMSA stands ready, willing and able to work with the ports on a balanced, collaborative approach to the CAAP: one that’s worked in the past and can work again in the future.

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Since 2006, when the first Clean Air Action Plan was jointly adopted by the ports of Los Angeles and Long Beach, significant emissions reduction has occurred in San Pedro Bay. The latest Air Quality Report Card shows sulphur oxides emissions from ships is down 97 percent and diesel particulate matter from equipment at marine terminals is down 86 percent over 10 years.