ED DENIKE
BY STAS MARGARONIS
Ed Denike, president SSA Containers, said that ocean carriers tell him that vessel congestion at the Ports of Los Angeles and Long Beach is likely to continue until March.
Denike, who spoke to the Propeller Club of Northern California via Zoom on January 12th, explained that congestion delays have seen as many as 40 ships waiting to be unloaded that amounts to a 7-8 wait per vessel.
Causes of Congestion
The primary reason is the large increase in container ships arriving at the two Southern California ports: “There has been an unprecedented increase in container ship traffic going to the Ports of Los Angeles and Long Beach.”
The delays and back-ups of ships waiting to enter the two ports comes at a time when there has been a 10% reduction in longshore workers showing up for work related to the COVID virus and a parallel delay unloading import containers at California warehouses due to a reduction of workers also related to the virus.
He amplified on the causes:
- COVID related illnesses “seem to be causing a loss of around 700 longshoremen showing up for work per day, which is about 10% of the workforce “… A related problem is that a longshore gang unloading and loading a vessel may not have all the skilled workers showing up for work in which case the gang cannot be dispatched.
- Imports that are going to the warehouses of beneficial cargo owners are subject to delays in unloading the import container and returning both the container and the chassis back to the terminal: ”The delays are resulting in major shortages of equipment that the terminals need to unload the ships. These are caused by COVID illnesses at the warehouses that we have no control over.”
These problems are likely to persist until the effect of the virus diminishes. Denike said the terminals have been working with the International Longshore and Warehouse Union (ILWU) to train more workers to reduce the shortfall caused by illness and deaths.
To help address the problem, the ILWU and the terminals have agreed to institute temperature checks at the gates of the terminals before workers enter. Denike said this was a positive outcome but believes temperature checks should be done at the ILWU hiring hall before the workers are dispatched, so they don’t go to the terminal, get tested, find they have a fever and can’t go to work.
Denike is hoping to work out a more efficient temperature check process with the ILWU.
Port of Oakland
Denike noted that longshore workers at the Port of Oakland are showing up with an average of 100 less workers per day, which corresponds to 10 – 12% reduction in the workforce. This is also COVID related.
The good news for Oakland is that three new superhigh 175-foot container cranes recently arrived from China. The 175-foot cranes will improve the ability of SSA’s Oakland International Container Terminal (OICT) to handle 17.000 teu and 18,000 teu ships, he said.
“Difficult” Contract Negotiations With ILWU Expected in 2021
He discussed additional challenges for U.S. West Coast ports:
- ILWU Contract Talks. Denike sounded a note of concern over contract negotiations between U.S. West Coast terminals and the ILWU scheduled to begin in 2022. He said “negotiations are going to be difficult” in obtaining a new contract for West Coast ports in 2022. On the plus side, he said the ILWU is much more supportive of the competitiveness of U.S. West Coast ports than in the past.
- Oakland A’s Proposed Howard Terminal Ballpark At Port of Oakland. He strongly opposes the proposed Oakland A’s ballpark at the Port of Oakland’s Howard Terminal. The proposed ballpark has caused “carriers to tell us that they will not sign long-term agreements with us if the ballpark is built. They are afraid that it will create traffic inside the Oakland Estuary, making it more difficult to turn ships around for loading and unloading at OICT.” He has also heard truckers voice concerns about picking up and delivering containers on the days that thousands of fans drive to the ballpark for baseball or other events: ”As OICT accounts for 70% of the container volume at the Port of Oakland, the loss of this business would have a serious impact on the Port … I think it’s a big mistake.”
- U.S. Rail Costs Are $400 Higher Per Container Than Canadian Rail Undermining U.S. West Coast Port Competitiveness. Rail transport charged by the Union Pacific and Burlington Northern Santa Fe railroads for transporting import and export containers in the United States to U.S. West Coast ports are $400 higher per container than the rail costs charged by the Canadian National Railway to U.S. shippers for transporting their containers to the two Canadian West Coast ports of Prince Rupert and Vancouver: “So, we have a competitive disadvantage with the Canadian ports.” He expressed the hope that the U.S. railroads will be responsive to the needs of maritime shippers.
- Zero Emission Requirements At California Terminals Will Be Expensive. Zero emission requirements for terminal handling equipment mandated by the State of California will triple the cost of purchasing this equipment at current market prices. Denike suggested that diesel electric equipment would be more affordable than all electric equipment.
- The Southern California Power Grid Is Inadequate To Meet Terminal Demands For Zero Emission Operations. The power grid in Southern California “needs increased power” in order to maintain the current power requirements for cargo handling at Southern California ports and provide the additional demand to meet California’s zero emission requirements. Denike recalled that when the automated and primarily electric-powered Long Beach Container Terminal at the Port of Long Beach went on line, it caused brief power outages in the city of Long Beach. This is a reflection of Southern California power grid inadequacies, he said.