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Area Development

West Coast Ports Unite to Solve Challenges

Q3 2015
Aside from strikes, executives at the Ports of Los Angeles and Long Beach (pictured) report that seaports also face other congestion-related challenges, particularly those caused by processing the ever-increasing number of supersized ships.
Aside from strikes, executives at the Ports of Los Angeles and Long Beach (pictured) report that seaports also face other congestion-related challenges, particularly those caused by processing the ever-increasing number of supersized ships.
Manufacturers of imported and exported goods between the United States and Asia let out a huge sigh of relief in late May when a five-year contract that governs pay and work rules at 29 West Coast ports was finally ratified. That dispute cost manufactures hundreds of millions of dollars in lost business due to a slowdown in cargo handling that began in November and fell over the major holidays of Thanksgiving, Christmas, New Year’s, and Easter.

“Voyage times between Asia, Australia, and New Zealand are already lengthy. When you add two, four or more days because of delays on the West Coast, it makes a difference to shelf-life requirements for commodities,” says Fred A. Sorbello, CEO of The Mullica Hill Group, part of the AGRO Merchants Group. Mullica Hill Cold Storage is the largest receiver of meat in the United States.
In an unprecedented step, the Ports of Los Angeles and Long Beach - rival seaports - are working together via an agreement that allows both ports to cooperate far more strategically on finding new ways to prevent congestion and cargo delays, improve the transportation network, and enhance environmental sustainability and security.
Despite the ratified agreement, manufacturers are certain that strikes and delays will continue at West Coast ports.

Rival Seaports Working Together
Executives at the Ports of Los Angeles and Long Beach report that seaports also face other congestion-related challenges, particularly those caused by processing the ever-increasing number of supersized ships. Consequently, in an unprecedented step, these rival seaports are working together via an agreement approved by the Federal Maritime Commission (FMC) that allows both ports to cooperate far more strategically on finding new ways to prevent congestion and cargo delays, improve the transportation network, and enhance environmental sustainability and security.

“Essentially, the ports can now talk about everything — except price and terms,” says Phillip Sanfield, Port of Los Angeles spokesperson.

Already a series of meetings hosted by the ports have been held between cargo owners, trucking firm leaders, longshore labor, marine terminal operators, and other goods movement industry representatives.

“Now we’re forming seven working groups to focus on improvements in peak season 2015, container terminal optimization, chassis ops, off-dock solutions, key performance indicators/data solutions, intermodal rail, and drayage,” reports Art Wong, Port of Long Beach spokesperson. “Working with us will be our key stakeholders: shipping lines, cargo owners, labor, railroads, trucking interests, equipment owners, and more.”

Similarly, the Seattle and Tacoma port commissions have plans to form a Northwest Seaport Alliance that will unify management of the two ports’ marine cargo terminals and related functions. During a joint public meeting on June 5, both ports voted on the final agreement to be submitted to the Federal Maritime Commission (FMC)

“Barring unforeseen circumstances, the agreement should be up and running August 1,” says Bari Bookout, director of Commercial Strategy at the Port of Seattle.

While both seaports have cooperated on a number of fronts for many years, competition has increased dramatically causing the seaports to look for a more formal way to do business together.

“We have been competitors for a long time,” comments Bookout. “But in reality, shippers and steamship lines look at us as one gateway.”

By combining the two ports’ marine cargo operations, port officials believe the Northwest region would be in an even stronger position to address competitive challenges and create new economic opportunities.

“It will allow us to leverage our investments more strategically and handle the big ships being deployed,” she concludes.

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