Seattle-Tacoma Vote to Form Port Alliance

Commissioners at the ports of Seattle and Tacoma have unanimously voted to launch the Northwest Seaport Alliance, according to the Wall Street Journal.

The Seaport Alliance unifies the two ports’ marine cargo terminal investments, operations, planning and marketing to strengthen the Puget Sound gateway and attract more marine cargo to the region. The alliance is anticipated to double cargo volumes by 2026 and allow the north-western US duo to compete with nearby Canadian ports.

The decision follows news that commissioners from both ports were preparing to hold a discussion regarding an alliance and are said to be retaining full ownership of all independent assets once the alliance is finalized.

The move is considered rare as the two ports had previously been rivals, however as larger containerships come into operation, it is becoming essential for ports to adapt.  The ever-changing port market has led smaller ports in the US risking closure because of a failure to mobilize resources.

“This alliance would become the third-largest trade gateway in North America, behind the ports of Los Angeles and Long Beach and the Port of New York/New Jersey. The Pacific Northwest is a key region for inbound and outbound United States cargo, moving cargo not only for the regional trade, but also cargo headed to destinations throughout the entire U.S. Midwest, and this Alliance will help the region remain competitive into the future”, said Federal Maritime Commison Chairman Mario Cordero  in a news release.

Stay informed with RCL Agencies updates about the latest port and shipping news!

 

Obama Signs Important Trade Legislations Into Law

President Barack Obama recently signed into law a Trade Promotion Authority renewal bill and the Trade Preferences Extension Act, which includes Trade Adjustment Assistance.

The TPA is a measure that gives the President greater negotiating powers on trade deals, allowing only and up or down vote in Congress on such deals, like the Trans Pacific Partnership (TPP).

TPP, the free trade agreement being negotiated with 11 other countries in the Pacific Rim, is geared at lowering tariffs and trade barriers. These 12 countries represent 39 per cent of the world economy.

The TPA gives Congress the ability to set negotiating guidelines for the United States up front, but at ratification it can only vote for or against the entire deal without making any changes.

Trade Adjustment Assistance, a program that provides aid to workers displaced by free trade deals, passed shortly afterwards as a separate piece of legislation. Obama also signed the Trade Preferences Extension Act of 2015.

The trade preferences law renews the African Growth and Opportunity Act (AGOA) for ten years, extends the Haiti HOPE/HELP trade program until 2025, and retroactively renews the Generalized System of Preferences (GSP) program, while updating it to remove an exclusion on travel goods. The law also makes important clarifications to the tariff classifications for protective active footwear and performance outerwear.

Stay informed with RCL Agencies updates about the latest trade and shipping news.

 

FMC to Order Carriers to Provide Data Key to Monitoring West Coast Agreement

The U.S. Federal Maritime Commission (FMC) is moving to force ocean carriers to provide data and information for monitoring an FMC-authorized agreement formed to combat West Coast port congestion.

According to the information provided by the Journal of Commerce, the FMC in a closed meeting last week unanimously voted to direct its staff to prepare an order to force the carriers to release the data and information. The agency declined to comment on what type of data and information carriers hadn’t handed over for regulators to use in monitoring the Pacific Port Operational Improvement Agreement ( the PPOIA).

The PPOIA agreement was formed to allow terminal operators and equipment managers to work with shipping lines, trucking companies and railroads to alleviate West Coast port congestion.

FMC commissioners have accused container lines and their vessel-sharing alliances of creating port congestion by inundating marine terminals with cargo from huge ships, and profiting by imposing congestion-related fees. The World Shipping Council has rejected those accusations, saying that port congestion has multiple causes and that large ships and alliances aren’t to blame.

Cargo interests, truckers and trade associations have urged the FMC to restrict marine terminals’ imposition of demurrage fees for late pickup of containers and carriers’ per-diem detention fees for late return of equipment.

After a series of hearings the FMC voted to release a report that stopped short of recommending official action but urged the industry to provide evidence of any charges that might be considered unreasonable.

Section 15 of the Shipping Act permits the FMC to order carriers to share data and information germane to its monitoring of agreements for which the commission has granted antitrust immunity. If the carriers don’t provide the requested data and information, the FMC can void the agreement.

RCL Agencies will provide further updates once available. Follow the latest shipping news via our blog!

USA Ports Move Toward Truck Appointment Model

In order to allow terminals to calibrate the flow of trucks into their gates and through their facilities, and to match truck demand with capacity at entrance gate and in each area of the terminal, a truck appointment system is being considered at some ports.

GCT Bayonne plans to introduce such a system this year, and other New York-New Jersey terminals are quietly preparing to follow. The Port of Virginia plans in June to begin testing an appointment system at Norfolk International Terminals and eventually expand it portwide. The NIT appointment system had a short-lived test last year.

Appointments remain the exception at container terminals, but the concept is gaining support. Various forms of appointment systems already exist at ports including Los Angeles, Long Beach, New Orleans, Vancouver British Columbia, Sydney Australia, and Southampton U.K.

Advent Intermodal Solutions’ eModal technology supports management of trucker appointments at several ports and will be used at New York-New Jersey and Virginia. All New York-New Jersey terminals have agreed to feed container availability data to their port’s system.

Truck management systems ranked high among recommendations last year by industry task forces created to find solutions to chronic congestion at terminals in New York-New Jersey and Virginia.Howver motor carriers question whether terminals can deliver the promised benefits with the new truck appointment system. Trucker reaction has ranged from skeptical to hostile. The truckers say that before going to appointments, terminals should extend gate hours and run their facilities more efficiently.

Ed O’Callaghan, president of Century Express in Hampton Roads, said it’s unrealistic to expect appointments to enable a congested terminal with four-hour truck queues to suddenly provide quick turn times.

Truckers say they won’t accept appointments until terminals can shorten turn times and end long queues. Advocates of appointments say that can’t be done until terminals know when a truck will arrive to pick up a particular container.

Everyone agrees that change is needed. Congestion and delays are frustrating cargo interests and generating disputes over demurrage and per-diem bills for late pickup or return of containers.

Trucker appointment windows will vary among terminals with different equipment, yard layouts and operating practices. At New York-New Jersey, GCT Bayonne uses a combination of RMGs and rubber-tired gantry cranes. Other port terminals use rubber-tire gantries or straddle carriers.

Terminals will have to decide how wide to make appointment systems, how much slack to build into the scheduling of trucks for the windows, and how to create a balance system of penalties and incentives for truckers and terminals.

At Port Metro Vancouver in British Columbia, truckers have two-hour appointment windows under a system that’s been in place several years. Under a government-brokered settlement to a truck driver strike last year, a $50 fee on daytime gate moves supports the operation of a second night gates that a second shift operates until 1 a.m.

In addition to the night gates, Vancouver’s appointments also have been tweaked to prevent a few truckers from scooping up all of the available slots and reselling them.

Average turn times for all trucks at GCT’s Vancouver terminals, including queues, are 22 to 28 minutes. Less than 3 percent of turn times are longer than the 90 minutes after which the terminal must pay a penalty.

Stay informed with RCL Agencies updates about  global shipping and international ports.

West Coast Port Truck Drivers Strike Against Four Companies

Reuters reported that according to a Teamsters union official  some truck drivers who haul goods from the nation’s busiest port complex in Los Angeles and Long Beach orchestrated a  strike Monday in the latest action as part of a long-running labor dispute at the West Coast’s shipping gateway.

The companies affected by the strike are Pacific 9 Transportation, Intermodal Bridge Transport, Pacer Cartage and Harbor Rail Transport.

The strikers planned to picket marine terminals, rail yards and other locations where the companies dispatch trucks, Teamsters spokeswoman Barb Maynard said. The truckers accuse the companies of wage theft by illegally misclassifying them as independent contractors, and the drivers demand to be treated instead as employees with the right to union representation.

The outcome of the dispute has implications for hundreds of companies and thousands of truckers in Southern California serving the twin ports, which handle 43 percent of containerized goods entering the United States.

About 500 port truckers have filed wage claims with state labor officials accusing their companies of misclassifying them as freelancers and charging them to lease the trucks they drive. The state has ruled on at least 56 such claims so far, siding in every case with drivers in awarding them back wages and penalties, the Teamsters say.

Thousands more drivers have yet to file claims, and port trucking companies in California could be liable for wage and hour violations of up to nearly $1 billion each year, the labor-backed National Employment Law Project has estimated.

It was not immediately clear how disruptive Monday’s actions might be. A series of such strikes last year caused little disarray at the ports.

Stay informed with RCL Agencies updates about the latest shipping news.

US Ports Welcome Cybersecurity Advances

According to the Journal of Commerce, the House voted 307-116 to pass the Protecting Cyber Networks Act, a bill designed to lay the framework for private companies to share data about known cyberattacks with federal investigators.

New legislation passed in the U.S. House Thursday could launch a federal review of the cybersecurity protocols at the nation’s seaports, giving the most-at risk ports an idea of how they’re vulnerable and how they can strengthen their defences

Bill proponents argue a fluid system for sharing that information will allow the government to crackdown on the tools and techniques hackers use to exploit, disrupt and destroy data.

U.S. ports handle roughly $6 billion worth of goods each day. They store vast amounts of data detailing every ton of cargo that passes through their waters.

Not only are cybercriminals attracted to ports’ commercial activity, but as many ports are government-owned or -operated, they are also prone to acts of terror and nation-state sabotage according to Kimberly Peretti, a Washington attorney specializing in cybersecurity.

The House bill would provide legal liability protections to companies that share information related to cyber breaches in their network, either with other companies or with the federal government.

The House cyber bill will now go before the Senate next for consideration. The bill may have found strong support in the House, but there is some pushback from privacy and civil liberties organizations.

Bill defenders argue the House bill would provide legal liability protections for companies that share cyberthreat information, but only after undergoing a series of critical cyber privacy screenings. If a company were to share information with the government, that data would undergo two rounds of screening: once by the company and a second time by the government agency — a civilian agency, not the National Security Agency or Defense Department — tasked with analyzing the data.

Stay informed with RCL Agencies updates about the international ports and global shipping.

Congestion at LA-Long Beach Ports Recovery Said to be”Far Ahead of Schedule”

Terminal operators in Los Angeles-Long Beach are beginning to reduce the vessel backlog built up during the longshore labor negotiations, raising the possibility that the largest U.S. port complex will be back to normal before mid-to-late May as originally expected, the port’s chief executive, Jon Slangerup said on April 1st.

Right now the port is “far ahead of schedule” in recovering from the vessel congestion that developed over several months while the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) battled over a new contract.  A tentative five-year contract was reached Feb. 20. Delegates of the ILWU caucus voted last week to recommend the proposal. It now goes to the rank-and-file for ratification. A final tally is expected to be announced May 22nd.

Terminals have increased the hours they are working, and the ILWU is dispatching full work crews, so the terminals are beginning to clear their yards, and they are unloading more containers from the vessels and are turning the ships faster.

Also, the two ports and the three major chassis-leasing companies in Southern California on March 1 rolled out a neutral, or gray chassis “pool of pools,” with full interoperability of the approximately 82,000 chassis in the pools. In most cases now, split moves in which the trucker had to deliver the container to one location and the chassis to another have been limited. Truckers can now deliver the chassis and container to a single location regardless of where the equipment originated.

As terminal congestion is eased, additional cranes will be assigned to each vessel and the ships will be worked back into normal rotations. This will benefit both the Southern California ports and also the Port of Oakland. During the peak of the crisis, a number of lines suspended calls in Oakland in order to get the ships back to Asia faster.

The port authorities of Long Beach and Los Angeles will soon begin discussions on ways to improve operations and to prevent a similar congestion crisis, Slangerup said. The first formal meeting is scheduled for later this month and will bring together all stakeholders, including labor, to identify immediate opportunities to improve container throughput and velocity.

RCL Agencies will continue to monitor the situation at the West Coast ports and provide further updates once available.

Driver Wage Increase Could Raise Truckload Pricing 12-18 Percent

A Journal of Commerce article reports that  increases in truck driver wages could raise  truckload rates by 12 to 18 percent.

Currently the American Trucking Associations estimates US carriers are short about 35,000 drivers. Continued economic growth will create more trucking jobs but those jobs are likely to be even harder to fill. Fewer hireable candidates — those who are drug-free and have good driving records — will be available for trucking companies to bring onboard. The annualized growth rate in trucking employment rose from 1.5 percent in January 2014 to 3.5 percent this January, BLS data show. But carriers still struggle to find truck drivers and keep them.

That will only serve to push driver pay and trucking rates higher, especially if U.S. wages overall begin to rise as many economists anticipate. Truckload driver wages already began climbing significantly last summer.  The reason for the increase is that truckload carriers will need to raise driver pay substantially to attract and keep the type of qualified candidates needed to haul freight.  Additionally,  new driver-related regulations will make hiring truck drivers harder, and more expensive.

The biggest cost component for a truckload carrier is labor, comprising anywhere from 25 percent to 35 percent of revenue. Therefore, if truckload driver wages go up approximately 50 percent to bring them in-line with the wages paid in the LTL market and attract significant new entrants, underlying pricing would need to rise 12 percent to 18 percent to fund these increases.

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ILWU, PMA Reach Tentative Agreement on Chassis Maintenance and Repair

The Pacific Maritime Association (PMA)  and the International Longshore and Warehouse Union (ILWU) have reached a tentative agreement on the issues of  chassis maintenance and repair, according to the Journal of Commerce.  This has been the major roadblock to reaching a new waterfront contract at West Coast ports.

Although details of the chassis agreement have not been released, it is believed that the ILWU mechanics will have the jurisdiction to inspect every chassis before it leaves the terminal. In recent years the carriers s sold their chassis to equipment-leasing companies. Those companies are not members of the PMA, and they have no contractual relationship with the ILWU.

Hundreds of longshoremen are mechanics, and their jobs would be threatened if the ILWU lost jurisdiction over chassis maintenance and repair (M&R). Since the chassis-leasing companies now own the assets, and are the financially responsible party if an accident occurs and injury or death results, the leasing companies must take M&R responsibilities seriously, which raises the question of why an additional inspection for roadability is needed at the marine terminals. Concerns also include  equipment being “red-tagged” as inoperable because of defects, if the ILWU chooses to do so frivolously to exert leverage over employers. During the negotiations, some truckers reported to their dispatchers that they were having trouble finding roadworthy equipment because the  ILWU in Los Angeles-Long Beach would randomly hold a “red-tag party” at various terminals.

On the East Coast, the International Longshoremen’s Association has the right to inspect all chassis before they leave the marine terminals.

PMA spokesman Steve Getzug said on Monday even thought that the tentative agreement was reached,  the ILWU work slowdowns in West Coast ports are continuing.

RCL Agencies will continue to monitor the development of the situation and report further updates once available.

Agreement Reached to Reduce Federal Oversight of Teamsters Union

Reuters reports that  the U.S. Justice Department has agreed to reduce the government’s 25-year anti-corruption oversight of the International Brotherhood of Teamsters.

The agreement between Preet Bharara, the U.S. Attorney in Manhattan and the Teamsters, which is the dominant union in the U.S. trucking industry, would dismiss a 1988 racketeering case against the union. It must be approved by U.S. District Judge Loretta Preska. 

To settle racketeering charges against the union, a 1989 consent decree called for a court-appointed monitor to be installed to oversee the Teamsters’ internal affairs. The organization also agreed to change their election process to root out corruption.

Bharara said significant progress has been made to overcome the union’s corrupt past, but that the government will move ahead cautiously.

The agreement that sets up a five-year “transition period” , seeks to ensure progress made under the consent decree’s disciplinary and electoral reform provisions will be preserved while reducing the government’s oversight role over time, according to the U.S. Attorney’s Office.  Union members are also permanently prohibited from associating with organized crime groups.

The union will establish its own independent disciplinary enforcement authority through the appointment of disciplinary officers approved by the government. Following this transition period, the government may apply to the court to do away with these changes if it finds the Teamsters electoral or disciplinary systems are functioning ineffectively or that there exists systemic corruption or organized crime influence in the union.

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