January volumes for the Port of Los Angeles (POLA) dipped 22.7 percent, with total volume at 529,427 TEU (Twenty-Foot Equivalent Units).
While the volume decline was steep, there was numerous reasons behind it, including terminal congestion, protracted contract negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union, and other supply chain-related issues, according to POLA officials.
POLA imports, which are primarily comprised of consumer goods, were down 28 percent to 259,206 TEU, and exports were down 23 percent to 124,365 TEU, and empties dropped 10.8 percent.
“The numbers aren’t a surprise to us, and last week’s announcement of a tentative labor agreement between the International Longshore Warehouse Union and the Pacific Maritime Association is a major step forward in terms of getting our cargo volumes back on track,” said Port of Los Angeles Executive Director Gene Seroka. “We’re working with our stakeholders to develop short-term solutions that resolve our present cargo backlog, in addition to longer-term solutions that focus on achieving higher levels of operational efficiency—especially in terms of servicing the larger ships deployed through carrier alliances.”
While January volumes were down and impacted by the months-long labor dispute between the PMA and ILWU, it followed 2014, which ended up as the port’s third-best month ever with a 6 percent annual volume gain over 2013, despite major congestion issues in the second half of the year and particularly plagued the POLA and the Port of Long Beach, too.
With that as a backdrop POLA Media Relations Manager Philip Sanfield explained that it was reasonable to expect that January volumes would be down, with the port expecting February volumes to be off as well.
“We hope to get back to normal sooner than later,” he said. “It was not surprising to see some of our neighboring ports experience similar drops. Vessels that would normally stay in the port for three-to-five days were instead here two or three times longer. You are not going to move a lot of cargo when the port is operating that slowly. But we believe we have turned a corner with last week’s announcement of the PMA-ILWU tentative labor agreement. There is plenty of work ahead. To get back to a sense of normalcy is going to take two-to-three months in order to get vessel strings back in order and clear out backlog. February volumes will be off, considering it has been less than a week since we have gone back to having full crews working and two-thirds of the month will have had the same slow turnaround as previous months with ships in port.”
The upcoming Chinese New Year is not expected to be a major drag on port operations as there are already several ships out at anchor waiting to get into the port, with most of the port’s berths filled. As of this morning, Sanfield said there are 27 container vessels at anchor between POLA and POLB, among a total of 36 at anchor, with 6 bulk carriers, 2 general cargo ships, and 1 reefer ship also at anchor.
Looking ahead to March, Sanfield said it is possible March volumes could see annual gains due to the currently high levels of cargo backlog.
As for other issues impacting port operations, Sanfield said that in the coming days it is likely a chassis pool will be rolled out at POLA and POLB by a trio of chassis leasing operators, which is expected to provide significant help. In November, LM reported that there is a working plan in place for a gray chassis pool, which is set to take effect on February 1, 2015. The Long Beach Press Telegram recently reported that the POLA brought together three major chassis providers and a terminal operator— Direct ChassisLink Inc., TRAC Intermodal, Flexi-Van and SSA Terminal—whom collectively have more than 95,000 chassis to create a pool system to share the chassis at the POLA and POLB complex.
With larger ships calling on POLA, which is one of only a few U.S. ports able to support them, with two 13,000-TEU ships in the port this week, Sanfield said that “is a good problem to have,” adding that the port is working with supply chain and logistics operators on ways to figure out ways to more efficiently sort cargo for both larger vessels and alliances.
“We are also looking at issues regarding trucking and PierPASS, improving the Web-based drayage deployment system, creating better technology systems throughout the port complex with real-time data for routing for trucking in the form of a potential routing system that is attractive for drivers and create driver retention and really looking to enhance terminal velocity,” he said. “We are working with port stakeholders and labor and management will have prime seats at the table to help facilitate these issues. We lost some cargo that has been diverted in recent months, and at the end of the day we intend to get that business back. We know we have the infrastructure and transit times; we just need to reinforce the reliability that was tarnished over the last few months and that is what we intend to do while addressing these supply chain and chassis issues and the sorting of cargo to go back to being the most efficient complex in North America.