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Port of Oakland Updates Operating Status, Waterfront Labor Talks

Press Releases, Seaport
February 9th, 2015

Press Release

For Immediate Release
February 9, 2015

Port of Oakland Updates Operating Status, Waterfront Labor Talk

 

Oakland, Calif. - Feb. 9, 2015 - The Port of Oakland today released the following update on seaport operations and the status of waterfront labor talks.  The report ​addresses the significant cargo buildup that has slowed cargo movement on the U.S. West Coast.  It also looks at prospects for a longshore labor contract settlement or the threat of a coast wide port shutdown.
This status report can be reproduced, excerpted or posted.  For quick, daily updates on the Port's status, go to www.Portofoakland.com
Status of Port operations
Q: What's the situation at the Port of Oakland?

A:  The Port of Oakland, like other major West Coast container seaports, is facing a significant cargo buildup.  10-12 vessels a day await berths at its marine terminals.  Vessels are arriving late and off-schedule due to delays at previous stops in Southern California.  Ships wait days for berths.  Cargo movement inside terminals has slowed down.  Truck drivers sometimes wait hours to collect containerized imports for delivery.  Cargo can be delayed days in reaching final destination.

Q: What's causing the buildup?

A:  An impasse between waterfront employers and longshore labor has led to disruptions, slowdowns and reduced port productivity. Other contributing factors include:

  • U.S. import volumes have increased with the strengthening economy;
  • The introduction of megaships has strained the ability of ports - especially in Southern California - to efficiently handle cargo;
  • Chassis, the truck trailers used to haul containers on the highway, are in short supply;
  • Through much of last fall, shippers diverted a significant amount of cargo to Oakland to avoid port congestion in Los Angeles and Long Beach;
  • Late-arriving vessels from Southern California are undermining berthing schedules.

Q: How long has this been going on?

A:  Congestion in Southern California emerged in the late summer of 2014.  The buildup in Oakland began in late November.

Q: Is this only affecting Oakland?

A:  No, all West Coast ports are affected by these issues.  The ports of Los Angeles and Long Beach are facing extreme congestion.

Q: Is there a lockout at Oakland or other West Coast ports?

A: No. Employers at West Coast ports suspended vessel loading and unloading Feb. 7-8 to clear container yards. Full operations resumed Feb. 9.
Consequences of cargo buildup and labor impasse
Q: Who's being hurt by the labor impasse and cargo buildup?

A:  The impact is felt worldwide.  Global supply chains - especially between Asia and the U.S. - have been disrupted. Multinational companies are reporting lost revenue and increased costs because they can't get products from overseas sources to markets or manufacturing centers.  But the real impact is closer to home.  Small business owners are unable to get goods on the shelf in time for long-planned merchandising programs.  Some are paying high premiums for work-arounds such as airfreight.  Manufacturers are at risk of closing down assembly lines because they don't receive parts shipments.  California's Central Valley growers can't get perishable agricultural exports through the marine terminals quickly and onto ships for delivery to overseas markets.  Thousands of independent harbor truckers are doing less business - and receiving less pay - because they're often stranded in long lines awaiting cargo.  Businesses are beginning to furlough workers because their operations are stymied by cargo delays.
Q: What is this situation doing to the Port?

A: The labor impasse and cargo buildup jeopardize the credibility and standing of West Coast ports.  Shippers and ocean carriers are losing confidence in the reliability of the ports.  They're diverting cargo to other gateways in Canada, Mexico or through the Panama and Suez canals to the U.S. East Coast.  Some vessels are temporarily bypassing Oakland because they’re behind schedule after Southern California calls.

Q: What's the financial impact to the Port?

A:  It's too soon to say.  Up until December, import volume was increasing at the Port of Oakland.  However, cargo volume numbers for January are expected to show a decline when statistics are released.  This could impact Port income.  Its revenue is directly linked to cargo volume handled by marine terminal operators.

Q: Is there no recourse for shippers - especially small businesses - damaged by this impasse?

A: Shippers can talk to the ocean carries they contract with or the marine terminal where their cargo is stored.

Q: Can't the Port help them?

A: The Port doesn't manage terminal operations or the movement of shippers' cargo.  It works with terminal operators to mitigate the impact of the cargo buildup.
Status of waterfront labor negotiations
Q: Who's involved in the labor negotiations?

A:  The Pacific Maritime Association is the group of ocean carriers and marine terminal operators that hires longshore labor on the West Coast.  The International Longshore and Warehouse Union represents dockworkers, marine clerks and others who work at the ports.  The two sides are negotiating a new contract.

Q: What's the hang-up on the labor front?

A:  The last contract expired in July of 2014.  Labor and management have operated without a contract since then.  After months without reaching agreement on a new deal, both sides requested the participation of a federal mediator.  Still, no agreement has been reached.

Q: What are the issues holding up agreement?

A: Neither side shares much detail about the negotiations.  Traditionally, waterfront negotiations have involved issues of jurisdiction, compensation, benefits and the use of technology on the waterfront. Reports indicate that the right to dismiss appointed arbitrators for waterfront labor disputes has emerged as an issue.

Q:  Why doesn't the mediator force a settlement?

A:  The mediator can only facilitate discussion toward agreement.  There's no prescribed power to enforce a settlement.

Q: What's the consequence of the impasse?

A:  Management-labor disputes have led to terminal disruptions, sporadic suspension of operations, declining productivity and a slowdown in the movement of cargo.
Q:  Why doesn't the government step in?

A:  There's no legislative authority for government to intervene when the two sides aren't working under contract.

Q:  Why doesn't the Port of Oakland step in?

A:  The Port of Oakland doesn't hire longshore labor or manage terminals.  It's not part of the negotiating process.

Q:  Can't anyone solve this labor situation?

A:  It's up to the negotiating parties to reach an agreement.  Pressure from the public directed at lawmakers could help influence an outcome but so far there has been no politically inspired settlement effort.
Port of Oakland's role
Q: What part does the Port of Oakland play in resolving the labor dispute and cargo backlog?

A:  The Port of Oakland is a landlord.  It leases facilities to operators who manage marine terminals, contract with shipping lines and hire longshore labor.  The Port doesn't hire dockworkers and has no role in the labor negotiations.  Likewise the Port doesn't oversee terminal operations.  It's the Port's responsibility to provide safe, efficient facilities and support maritime interests in moving cargo
Q: Is the seaport the only business of the Port of Oakland?

A:  No. The Port of Oakland also manages Oakland International Airport and more than 20 miles of commercial real estate on the city's waterfront. The real estate holdings include historic Jack London Square.

Q: Is the Port doing anything about the labor issue and the backlog?

A:  Yes.  The Port has advocated publicly for a settlement of the contract dispute.  It's in daily contact with labor and management to understand the issues.  It's working daily with terminal operators and shippers to mitigate the impacts of the dispute.

Q:  What steps has the Port taken?

A:  The Port has worked with terminal operators on extraordinary measures that include:

  • Weekend gates
  • Express lanes in terminals
  • Additional parking for trucks and containers
  • Daily status updates for shippers and their truckers

Q:  What's the Port of Oakland's stand on the labor impasse?

A:  The Port of Oakland issued the following statement Feb. 4: "The West Coast waterfront labor impasse needs to be settled... quickly. Importers and exporters are suffering significant cargo delays. Central Valley farmers can’t ship their produce. Small business owners can’t get goods to put on the shelf. Harbor truckers can’t do their jobs. Everyone is suffering. If the situation, worsens... if West Coast ports shut down, the U.S. economy and the global supply chain will be jeopardized. In the San Francisco Bay Area, 73,000 jobs that depend on the Port of Oakland will be at risk. The impasse is good for no one. It is time to reach agreement on a new contract and put the disruptions and delays behind us."
Outlook for West Coast ports
Q:  How much longer can this impasse go on?

A:  There is no legislative or regulatory prescription for a settlement. The two sides have already been talking for nine months and still, there's no agreement.  But recently the management negotiating group has said ports are nearing gridlock which could bring operations to a halt.  That would likely precipitate federal intervention leading to an eventual settlement.

Q: Will there be a strike or shutdown at the Port?

A:  That's up to the two sides negotiating for a new contract.  Labor spokesmen have said the parties are close to agreement.  Management has said West Coast ports are near gridlock which will soon result in a shutdown.

Q:  If the dispute was settled, would ports go back to normal operations and cargo delays end?

A:  Maritime officials estimate it could take two months after a contract agreement to clear out the cargo backlog on the West Coast.

Q:  What are the immediate risks associated with a Port shutdown?

A:

  • A coast wide work stoppage would disrupt supply chains and bring cargo movement to a halt;
  • Tens of thousands of workers, from truckers and longshore labor to railroaders - could lose jobs;
  • Factories could shut down;
  • California's agricultural economy could be jeopardized;
  • Small business owners could be forced to shutter their companies;
  • Independent owner-operators could default on payments for their trucks;
  • Consumers could find goods in short supply;

Q:  What are the long-term risks?

A:

  • Shippers could abandon West Coast ports for other U.S. gateways;
  • More than 70,000 Bay Area workers depend on the Port of Oakland for jobs and many of those jobs could be affected;
  • The U.S. consumer economy, which is based on low-cost sourcing of goods from Asia, could be undermined.

About the Port of Oakland:
The Port of Oakland oversees the Oakland seaport and Oakland International Airport. The Port's jurisdiction includes 20 miles of waterfront from the Bay Bridge through Oakland International Airport. The Oakland seaport is the fifth busiest container port in the U.S.; Oakland International Airport is the second largest San Francisco Bay Area airport offering over 300 daily passenger and cargo flights; and the Port's real estate includes commercial developments such as Jack London Square and hundreds of acres of public parks and conservation areas. Together, through Port operations and those of its tenants and users, the Port supports more than 73,000 jobs in the region and nearly 827,000 jobs across the United States. The Port of Oakland was established in 1927 and is an independent department of the City of Oakland. Connect with the Port of Oakland and Oakland International Airport through Facebook, or with the Port on Twitter, YouTube, and at www.portofoakland.com.

Media Contact:

Robert Bernardo
Communications Manager
Port of Oakland
(510) 627-1401
rbernardo@portoakland.com

Marilyn Sandifur
Port Spokesperson
Port of Oakland
(510) 627-1193
msandifur@portoakland.com