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Previously from JJB


February 11, 2015/  Volume 2015, Issue 5

PMA to Shutdown West Coast Loading/Unloading 4 Days:

Feb 12, 14 - 16

Dear Valued Customer,

 

The Pacific Maritime Association (PMA) said that it will close dockworker shifts at 29 West Coast ports to all loading and unloading of vessels on 4 out of the next 5 days:  this Thursday Feb. 12 and over the weekend (Feb. 14 - 15) and also on Monday Feb. 16. This announcement comes on the heels of a shutdown this past weekend Feb. 7-8, which the PMA announced on Feb. 6 (here).

 

The PMA has voiced their objection to what they described as ILWU's demand to have the right to fire arbitrators that rule against them. Four arbitrators act as independent third parties in disputes between port operators and local unions. When a contract is in place, and a disagreement occurs, the two sides meet with an arbitrator and lay out their respective cases, and both sides must accept the arbitrator's decision, meaning that disputes can be quickly resolved without lengthy work disruptions.

 

The ILWU's demand to be able to fire any arbitrator would give them "veto-power over arbitrators' rights to prevent slowdowns," said a PMA statement. Currently both sides must agree to dismiss arbitrators, said PMA.

 

With dozens of ships sitting at anchor in the various West Coast harbors waiting to be worked, the shutdowns are exacerbating congestion and are severely impacting other parts of the supply chain.

 

Hanjin Shipping said Tuesday its ships will stop calling the Port of Portland, Oregon effective March 9. Hanjin will continue to provide service to and from Portland and nearby regions via rail and truck transport to and from Seattle. Hanjin said the new rotation for its PNH service will be: Ningbo, Shanghai, Pusan, Prince Rupert, Seattle, Vancouver, Pusan, Kwangyang, and Ningbo. The decision to end service will have a big impact on some shippers, as has strife in recent years between longshoremen and the operator of Terminal 6 in Portland where Hanjin called.

 

Last week, the Harbor Trucking Association (HTA) of Southern California announced that trucking companies who serve the Ports of Long Beach and Los Angeles have invoked force majeure. At issue are substantial demurrage and per diem charges caused by the ongoing labor dispute and resulting port congestion. This declaration of force majeure by Truckers states they cannot be held responsible if they are unable to perform a contracted service due to forces beyond their control.

 

Demurrage is incurred storage fees if cargo exceeds the allowed free-time on the dock. Per Diem or Detention Fees are charged to the drayage company when container equipment is not returned to the pier within a certain number of days and may not be apparent until weeks later.  Truckers routinely pass these fees on to their customers, the importers and shippers.

 

The HTA stated in a press conference on February 6 that this action falls under the terms of the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA). This agreement defines terms of service between drayage companies and providers of container equipment. Truckers participating in this action are claiming force majeure in the same manner as ocean carriers who retain force majeure clauses in all of their UIIA's.

 

Severe West Coast port congestion is preventing truckers from picking up and returning equipment on time resulting in substantial demurrage and per diem fees, which are in turn passed on to the importers.

 

Industry groups, along with Reps. Dave Reichert, R-Wash. and Janice Hahn, D-Calif., criticized the Pacific Maritime Association and ILWU for taking U.S. commerce hostage over the months-long impasse in labor negotiations. The National Retail Federation and the Footwear Distributors and Retailers Association said the worsening crisis at the ports is causing big losses for traders and is teetering on a full blown disaster. The National Retail Federation said (here) that the slowdown at the ports is impacting all stages of the supply chain, from producers to logistics workers and is threatening long-term business.

 

The National Retail Federation said that the Obama administration "cannot sit on the sidelines." The Federation led dozens of House lawmakers in the past days to urge the PMA and ILWU in a letter to both parties to strike a deal on a contract.

 

Meanwhile, Cesar Maldonado of AgTC is spearheading a California Specific Letter to the California Congressional Delegation on the situation at the West Coast ports. California companies, associations, and  any others  directly or indirectly impacted by the port disruption such as logistics providers, truckers, growers, processors, freight forwarders, customs brokers, vendors, associations, Chambers of Commerce, local governments, commissions, (agriculture or otherwise) are encouraged to add their organization's name to the letter. If you are interested in adding your company to the letter, you can email mailto:cesar@agtrans.orgwith your company/association name and county and contact person's email address. Company and association names are due by COB this coming Tuesday, Feb. 17.

 

The PMA had proposed a "comprehensive offer" to the ILWU on Feb. 4, according to a statement (here). However, despite the involvement of Federal Mediators, the dispute continues unresolved. Peter Friedmann of FBB Federal Relations expressed his optimism that he believes an agreement may be reached within the next few weeks.

 

James J. Boyle & Co. will continue to monitor the situation to keep our customers apprised.

 

Keep yourself updated with the latest industry happenings, subscribe to JJB's Newsletters

Los Angeles

Kent Sunakoda

mailto:ksunakoda@jjboyle.com

(323)263-8100 ext. 327

Portland

Lisa Whiles

mailto:lwhiles@jjboyle.com

(503)284-0909 ext. 120

Seattle

Terry Pilant 

tpilant@jjboyle.com

(206)447-9580 ext. 104 

San Francisco

Connie Arimoto

carimoto@jjboyle.com

(650)871-6334 ext. 3130

        

The information accompanying this newsletter contains confidential information belonging to the sender which is legally privileged. The information is intended only for the use of customers of James J. Boyle & Co. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the content of this information is strictly prohibited. James J. Boyle & Co. will also not be held accountable for any discrepant information. The service we provide is based on our "Terms and Conditions of Service", which is available upon request.


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