California ports try to balance flow, COVID-19 safety

Date: Wednesday, March 18, 2020
Source: JOC.com

Volumes in the eastbound trans-Pacific are down noticeably so far this year, which helps ports to mitigate the impact of COVID-19.

Having been designated “essential businesses” by state and local agencies, the top California ports and the supporting freight logistics network are trying to find a balance between preventing the spread of the coronavirus disease 2019 (COVID-19) and keeping cargo flowing.

Marine terminals and the International Longshore and Warehouse Union (ILWU), likewise, are adjusting their operations so they can fill their worker dispatch orders and handle existing cargo volumes while at the same time protecting dock workers’ safety, according to employers and the ILWU.

The ports of Oakland, Los Angeles, and Long Beach have been successful at handling current cargo flows due in part to cooperation among members of the international supply chain, but also because volumes in the eastbound trans-Pacific are down noticeably this year. US imports from Asia declined 17 percent in January and 2.7 percent in February from the same months last year, according to PIERS, a sister company of JOC.com within IHS Markit.

The California ports released statements this week stating they are maintaining full operations while complying with all health and safety mandates.

“The port’s marine terminals are receiving vessel calls and workers are transferring cargo off and on ships under the health-protective directives established by the US Coast Guard and Customs and Border Protection, with guidance from the US Centers for Disease Control and Prevention,” the Port of Long Beach said.

The ILWU Tuesday issued a statement saying the 10,000 dockworkers in Los Angeles-Long Beach are moving cargo.

“When shelves get stocked at grocery stores and big box stores, and hospitals have the drugs and medical equipment they need, it is because ILWU members are hard at work,” the union said. “The goods that arrive in Los Angeles and Long Beach don’t just stay in California. They are dispersed throughout the country.”

James McKenna, president of the Pacific Maritime Association (PMA), the employer group that negotiates and administers the coastwide contract, said the PMA is working with the ILWU to ensure the daily worker dispatches that occur at the halls each day are carried out in a safe environment. Individuals who show up for dispatch are spread out in entering the halls to ensure safe distances are maintained, he said.

Workers maintain proper distances

Warehouse and distribution center operators are taking steps to ensure that essential workers are able to work at the facilities while complying with safety guidelines. An operator who requested anonymity said his facility workers are able to maintain social distances, and an hour has been placed between the day and evening shift so the cleaning crew can sanitize the warehouse.

“We’re trying to find a balance between keeping safe and keeping our business running,” he said.

Trucking companies and warehouse operators are assuring customers they are able to handle their freight movement needs. Scott Weiss, vice president of business development at Port Logistics Group, said the first question he must answer when customers call is, “Are you open?”

“We’re all hands on deck. We’re fully operational,” Weiss said.

With 1.8 billion square feet of industrial and distribution space in Southern California, demand is strong for port-dependent properties, and deals are being made, but the timeline may be longer than usual.

“There’s a level of disruption, but there’s a high level of cooperation,” said Kevin Turner, executive director of Cushman & Wakefield in Southern California. “Where there are deadlines, the deadlines are getting extended for deals in the works.”  

Return of empties still problematic in LA-LB

Some terminal operators in Los Angeles-Long Beach have limited the return of empty containers over the past month because dozens of blank sailings compromised their ability to return the empties to Asia. In order to prevent their facilities from being overwhelmed with empty containers, some terminals implemented measures such as confining empty returns to truckers who had appointments to pick up inbound laden containers.

Terminals this week are beginning to loosen restrictions, and some are edging toward normal gate hours, although a return to 10 work shifts each week is not expected to take place until cargo volumes return to normal, which is expected to occur in early April.

“The empties are getting better. The gates are getting a little bit better. Shifts are opening up, but we still can’t get an appointment every time on every day we want one,” said Robert Loya, vice president of drayage operator CMI West.  

Los Angeles-Long Beach is not yet free and clear from the issues of returning empty containers and equipment that began in early February. A modest import surge occurred in January as factories in Asia filled their final orders before closing down for the annual Lunar New Year celebrations that began on Jan. 25. The factory closures in China extended well into February due to coronavirus.

Just as the laden inbound containers were unloaded at distribution facilities in Southern California, carriers in the eastbound Pacific began to cancel sailings due to a sharp drop in exports from Asia. More than 60 sailings to the West Coast have or will be blanked from early February into April. Fearing they would be overrun with empty container returns with significantly reduced vessel capacity to return the empties to Asia, marine terminals issued restrictions on empty returns.

As import volumes plunged, terminal operators began to cancel work shifts, and the closures are expected to continue until the end of the month. The 12 container terminal operators in Los Angeles-Long Beach announced a total of 58 day or evening shift closures from Monday through March 30. Truckers say they are therefore still struggling to secure all of the appointments they need.

“The appointments keep filling. Our guys are still not able to get the appointments they need,” said Fred Johring, president of Golden State Logistics. “We’re still sitting on empties. There’s no place to terminate chassis. The terminals will not take them.”

The ability of terminal operators to accept surges of empty returns varies from day to day based upon vessel arrivals and the expiration of free time for container storage. Anthony Otto, president of Long Beach Container Terminal, told JOC.com Tuesday that LBCT was accepting all empties.

“Right now, we won’t say no, but that changes every day,” he said. If hundreds of empty container returns occur on a subsequent day, the terminal will accept as many as it can, but that might mean some empties can’t be handled that day, he said.  

 

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