LOS ANGELES – Terminal operators at West Coast ports are digging themselves out of the backlog of cargo that resulted from longshore worker slowdowns over the past two weeks. If productivity continues to pick up, the ports will be back to normal by the end of this week, officials say.
It will be in the nick of time. Importers and carriers expect that imports from Asia will be especially strong in August, so it is essential that the wharves, container yards and intermodal rail transfer facilities are cleared by then.
“August will be a big month,” said Frank Butters, who negotiates shipping contracts for the National Customs Brokers and Forwarders Association of America Shippers Association. “September, traditionally, is even stronger,” he added.
Toy imports, a good barometer of how the peak holiday shipping season will turn out, began to increase noticeably in mid-July and are likely accelerate in the weeks ahead. “We’re looking at a September peak,” said a traffic manager at a large toy importer. “August and part of October will be pretty darn close to September,” he said.
West Coast ports were hit hard by dockworker slow-downs the past two weeks. When the International Longshore and Warehouse Union contract expired on July 1, container moves per hour began to drop, and by the time a tentative contract was reached on Thursday, productivity at most terminals was no better than 60% of normal. On some shifts, container moves per hour were 14% to 20% of normal.
As a result, vessels were delayed in port, containers began stacking up at marine terminals, container flows to intermodal rail transfer yards slowed down and long lines of trucks began to form at marine terminals, especially in Los Angeles-Long Beach.
Oakland was hit especially hard by the job actions. ILWU locals in Northern California shut the port down for two days, and vessel operations suffered for more than a week. The port reported that 11 vessels bypassed Oakland to ensure they remained on schedule.
After the tentative contract was announced on Thursday, productivity was turned back on like a light bulb. Longshoremen who had refused to work extended hours in Los Angeles-Long Beach accepted such assignments beginning Thursday night.
The same was true in the Pacific Northwest. When the ILWU turned down early morning gate work and refused to work through meal hours, long truck lines began to form immediately at the ports of Seattle and Tacoma, said Dan Gatchet, president of West Coast Trucking and chairman of the intermodal conference of the Washington Trucking Association.
“It had a huge impact on cargo flow,” he said.
Port officials and terminal executives said that given the extent of the backlogs at some facilities and the strong flow of cargo over the weekend, it will probably take until mid-week to clear the terminals.
“Work is returning to normal, thank heaven,” said Robert Kleist, corporate adviser in Los Angeles to Evergreen America Corp. He estimated that the facility should be back to normal by mid-week.
Shippers and terminal operators are concerned about eliminating backlogs because imports from Asia have been quite strong this summer, even before the Christmas merchandise began moving. Statistics released by the neighboring ports of Long Beach and Los Angeles, the nation’s top two container ports, show a 6% to 8% increase in loaded import containers in June. Those increases were on top of a strong June 1998 performance.
Seattle performed even better, with inbound containers increasing 20% in June, said port spokesman Imbert Matthee.
Carriers and shippers anticipate a strong peak shipping season that should last at least into October. Carriers say vessel space will be very tight in the coming weeks.
Shippers, though, say the approximately 15% increase in capacity this year in the trans-Pacific should result in enough vessel space for all importers of Asian merchandise. This would be in marked contrast to the 1998 peak season, when space was so tight importers bid up the price of getting on ships.
“With the extra capacity, it’s not going to be a problem getting space,” Butters said. “September will be a full month for carriers, but you won’t see the cargo rolling you did last year,” he said.
