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import, Export Container Load Shipments via Portland

import, Export Container Load Shipments via Portland

Posted by Reid Malinbaum on Wed, Jun 04, 2014 @ 01:28 PM

Import Export of Container Load Shipments via Portland Port

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International shipping Portland port resized 600

News Sourced through JOC

Either Portland has a bright future as a niche container port in the Pacific Northwest, or it will watch much of its business migrate to other ports in the region, depending upon how the
International Longshore and Warehouse Union addresses the port s flagging productivity.

Bill Wyatt, executive director, believes Portland will reverse the loss of container volume it has experienced in recent years and will attract new business, if the ILWU improves its cargo-handling productivity and makes peace with terminal operator ICTSI.

Portland s container volume plunged to 178,451 20-foot container units in 2013 from 339,571 TEUs in 2003 (20′ containers equivalent units), according to port statistics.

On the optimistic side, Portland actually has a lot more cargo than it has capacity, Wyatt said. The goal of port staff is to secure a second weekly trans-Pacific service, and to attract
additional cargo in the north-south trades.

Portland was an operating port until 2010, when it contracted with ICTSI to operate its container facility, Terminal 6. When it was an operating port, Portland allowed inefficient work practices to creep in, practices that could be found nowhere else on the coast, Wyatt

Portland lost $17 million in its final year of operating the facility. We had to become more efficient, so ICTSI got on to these high-cost work practices, Wyatt said. It is ICTSI s attack on
inefficient work practices that is the real cause of the animosity between the union and ICTSI, Wyatt maintains.

The incident that sparked the bad
feelings began as a jurisdictional dispute between the ILWU and the
International Brotherhood of Electrical Workers over the equivalent of two jobs
plugging, unplugging and monitoring refrigerated containers at Terminal 6.

Portland always had split jurisdiction. The ILWU (international longshore & warehouse union) did the mechanical work, and the IBEW controlled the electrical work. Portland was not a member of the Pacific Maritime Association, which negotiates and manages the ILWU labor contract, and its arrangement for electrical work
with the IBEW went back to the 1930s.

When ICTSI began operating Terminal 6 and joined the PMA, however, the ILWU claimed jurisdiction over the reefer obs, charging that PMA members should assign all work to the ILWU. The port maintained that it controls the reefer work, and its contract with the IBEW
remained valid even after ICTSI took over operation of Terminal 6.

The reefer issue was litigated for more than a year until it was put to rest by Oregon Gov. John Kitzhaber, who brokered a deal last December that assigned the reefer jobs to the ILWU.

However, during the year-long dispute, the ILWU significantly slowed down its cargo-handling, increasing operational costs for ICTSI and Hanjin Shipping Co., the main tenant.

The lower productivity was confirmed by an independent consultant who found that productivity at Terminal 6 before the dispute was more than 27 container moves per crane per hour, but last year it dropped below 20. According to the port, productivity remains around 20 to this day.

Carriers demand productivity in the high 20s to low 30s so they can quickly turn large vessels that cost more than $100 million each. Hanjin last year threatened to leave Portland if
productivity does not return to the high 20s.

Portland convinced Hanjin to stay this year with its Weighted Volume Container Carrier Incentive Program, which encourages all of the container carriers to increase their volumes. Funding comes entirely from payments that ICTSI makes in its lease for Terminal 6, and
the incentives are capped at $4 million, the port stated.

The ILWU has publicly criticized the incentive program, saying that it encourages ICTSI to embrace a bad business model. Leal Sundet, ILWU coast committeeman, said in a recent interview if the subsidies stop, the marketplace will determine ICTSI s business model, which he charged was developed for a third-world environment.

Sundet also denied that the ILWU is engaged in work slowdowns. He blamed the drop in productivity on the port-owned and maintained cranes. Half of them are not working, he said. Sundet also said ICTSI, which owns the rolling stock, has a shortage of yard equipment. Due
to safety issues involving the cranes and rolling stock, the ILWU has no choice but to operate the equipment slowly, he said. That explanation was blown out of the water on May 30 when Jeffrey D. Wedekind, a National Labor Relations Board administrative law judge, adjudicated a complaint covering the period from September 2012 to June 2013. Wedekind said there is ample evidence to prove that the ILWU operated cranes much slower that necessary and drove yard equipment via the scenic route around the terminal.

Wedekind said the problems began in May 2012 when the ILWU threatened to shut down ICTSI operations and began engaging in work slowdowns. A federal court in Portland issued a temporary restraining order in July 2012, but the slowdowns continued, he said.

If the NLRB agrees with Wedekind s assessment, the ILWU headquarters in San Francisco and ILWU Local 8 in Portland must cease to encourage work slowdowns or the union will face possible court sanctions.

The port authority has taken the complaint concerning equipment maintenance seriously. Port spokesman Josh Thomas said one post-Panamax crane is out of service for repairs and is
awaiting a part that must be machined overseas. That is the only crane out of service. It has not involved half the cranes, he said.

Thomas also noted that Gov. Kitzhaber ordered an independent review of maintenance practices and equipment availability at the terminal, and that review is underway.

Sundet said worker morale would improve if ICTSI agreed to meet with the union to discuss productivity. The ILWU has its ideas about how to increase productivity, he said.

ICTSI wants to meet face-to-face with the union on these issues, and in fact scheduled meetings, but to our disappointment they have cancelled without reason on two separate occasions, said Elvis Ganda, chief executive officer, ICTSI Oregon.

The ILWU has stressed in its releases that ICTSI is foreign-owned, based in the Philippines, and its business model is to operate terminals in niche ports where it can establish a monopoly. Its
style is to squeeze the government and squeeze the workers, he said.

Ganda responded that ICTSI signed the contract with Portland not because it wished to operate the only container terminal in Oregon like a monopolist, but because it sees growth opportunities in a number of cargoes generated in the region, both in imports and exports.

Our success stems from our strategy to identify niche port operations, such as Portland, and invest in them to make them successful to benefit the local and regional community. It s exciting to think about the real potential for Terminal 6, Ganda said.


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