Ports Performance Act receives strong support from supply chain stakeholders

As reported by LM in May, four Republican senators-U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.), along with Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.), Sen. Deb Fischer (R-Neb.) and Sen. Cory Gardner (R-Colo.)-introduced S. 1298, the Ports Performance Act,” which calls for common sense reforms for U.S. port authorities.

A main emphasis of the bill focuses on the early identification of port disruptions caused by labor strife or other factors before they inflict serious damage on businesses and the broader U.S. economy. In many ways, this bill serves as a direct response to the months-long West Coast port labor disruption over labor contract negotiations between the Pacific Maritime Association and the International Longshore & Warehouse Union. Prior to the ILWU and PMA reaching a new agreement in May, their differences led to nine months of labor unrest and uncertainty that impacted freight flows and port operations in the form of terminal congestion and related supply chain challenges.

The Ports Performance Act’s language is included in the Senate Commerce, Science, and Transportation Committee’s six-year Comprehensive Transportation and Consumer Protection Act of 2015, which was introduced last week.

And it offers up a new level of transparency and accountability for ports, including requiring:
-the director of the Bureau of Transportation Statistics (BTS) to establish a port performance statistics program and report annually to Congress on the performance and capacity of the Nation’s key ports;
-U.S. port authorities that are subject to federal regulation or that receive federal assistance to report annually to BTS; and
-the Secretary of Transportation, in consultation with the Secretaries of Labor and Commerce, to report to Congress on a port’s performance before and after the expiration of maritime labor agreements to help indicate whether labor discussions have impacted operations, the estimated economic impact of such disputes and roughly how long it will take for shipments to return to normal

Last week, more than 100 business groups, which included transportation and logistics providers and other supply chain concerns, penned a letter to U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune, heralding the approval of the Ports Performance Act by the Committee.

“We believe this bill is an important first step to gain empirical visibility into how U.S. ports are operating, identify key congestion issues, and ensure our nation’s commerce continues to flow efficiently,” the stakeholders said in the letter, adding how “U.S. ports are a key component in the American transportation system and the global supply chain that thousands of businesses and millions of workers depend upon for the efficient movement of goods.”

They added that for various reasons, congestion at U.S. ports of a common occurrence and has led to slowdowns, bottlenecks, and chokepoints that have a negative impact on cargo flows and supply chain stakeholders, also citing the damage caused to the U.S. economy resultant of the West Coast port labor situation.

“Today’s reality is that supply chain stakeholders do not have any consistent or objective means to measure performance in these key marine transportation nodes,” according to the letter. “[T]here is a strong need to start collecting basic uniform data on port performance. This is an essential step to ensure that we fully understand the current and future challenges facing our ports and identify the right solutions.”

The Ports Performance Act received a sound endorsement from Paul Bingham, vice president at Boston-based EDR Group, whom explained that the idea of better port performance monitoring helping shipper decision-makers it a good one. But he cautioned is also comes with challenges, too.

“Additional information beyond what has been available from carriers and private data vendors could assist shippers in better planning congestion mitigation,” he said. “However the ability for the government to force the ports to comply with providing useful data reporting is still somewhat limited.  There are too many entities involved in the maritime port supply chains besides port authorities for in-terminal or port authority metrics alone to provide a comprehensive picture of congestion and delay factors.   In many of the largest U.S. ports, the port authorities are landlords over private (and competing) terminal operating companies that are not eager to share what they consider as proprietary operating performance statistics within the terminals.  These include container dwell times, crane throughput, storage space utilization, port truck gate-to-gate times, vessel loading/unloading times, etc.”

What’s more, he pointed out that legally the port authorities and terminal operators may be able to be compelled to report, but the indicators reported may not capture all the factors affecting cargo throughput from a shipper perspective.  

“Delayed vessel arrivals and berthing due to weather or other vessel operational issues are one factor beyond port (and terminal operator) control, as is connecting railroad performance (apart from on-dock rail operations), or outside-the-port highway congestion or port trucker labor issues affecting port dray trucker performance,” he said. “The chassis availability issue and the empty container availability (for exporters) have both contributed to recent port congestion problems while being largely out of port authority control, and are likely to continue to be.  This is true even if longshore labor chassis inspection-related delays are minimized, as the ocean carriers have exited the chassis supply business.  With the ocean carriers less interested in storing empty chassis within the terminals, data on chassis on terminals are only going to tell part of the chassis story.  Off dock chassis depots or other inland chassis management / availability systems may affect overall throughput at the ports but are not likely to be well captured in data by Port Authorities unless the chassis pools can be forced to collect and report statistics on chassis availability to them.”