February 18, 2015

Port of Oakland posts steep drop in January volumes; labor impasse blamed

Nineteen vessels backed up in San Francisco bay waiting to be berthed.

By DC Velocity Staff

The Port of Oakland said today that volumes in January declined dramatically from the same period a year ago, as a nine-month contractual impasse between West Coast dockworkers and employers took a severe toll on business.

Containerized imports dropped 39 percent year-over-year, while exports fell 26 percent. Total volume fell 32 percent, the port said.

Port officials blamed the decline on the impact of the ongoing contract battle between the International Longshore & Warehouse Union (ILWU), which represents about 20,000 workers at 29 West Coast ports, and the Pacific Maritime Association (PMA), representing employers. PMA has accused the ILWU of conducting a deliberate work slowdown since late October by not making skilled crane drivers available to handle the boxes coming off the vessels. ILWU has said its members are ready to work, and blame the slowdown on irresponsible management moves, including scrubbing all vessel loading and unloading operations over the President's Day weekend.

Both sides, which have been working without a contract since July 1, have returned to the bargaining table accompanied by U.S. Labor Secretary Thomas E. Perez, who was dispatched to California by President Obama last weekend to facilitate negotiations.

At Oakland, the nation's fifth-busiest port, many import boxes are sitting aboard vessels that are still on the water; as of this morning, 19 vessels were on San Francisco Bay waiting to be berthed. Exports are piling up, and in some cases rotting, in warehouses because vessels can't first be unloaded to even begin accepting export traffic. Importers are rerouting Asian-originating cargoes to ports along the U.S. East Coast, and into Canada and Mexico. As of last week, Oakland's biggest marine terminal was operating at 50 percent of the capacity, and its second largest at 65 percent of capacity, J. Christopher Lytle, head of the port, said in a phone interview.

The problems have made life especially difficult for Oakland's customers. For one, exports account for 55 percent of its traffic because of the port's proximity to central California's enormous agricultural breadbasket. What's more, vessels that would sail from Asia to either the Ports of Los Angeles and Long Beach and then call up the coast in Oakland are instead returning directly to Asia from southern California. Importers whose goods would normally head by ship to Oakland for unloading and final delivery must discharge their freight in Los Angeles or Long Beach and move them overland to their final destinations, a more expensive haul. Port officials can't quantify how often that is happening, said Mike Zampa, a port spokesman.

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