The Pacific Transportation Association will be staging its annual Port and Terminals Luncheon next month, which will address a key green issue for the industry.
By Patrick Burnson
Published: May, 2010
The keynote speaker is John Hummer, director of the Northern California Gateway Office of the U.S. Department of Transportation Maritime Administration (MARAD). The talk will focus on the Marine Highways program, which represents MARAD’s priorities in the next five years for identifying transportation bottlenecks and improving freight movement. The event takes place on June 3 from noon to 2 p.m. at Scott’s Restaurant in Jack London Square. For more information, visit www.pacifictrans.org.
As part of the Marine Highways program, MARAD will help to identify rivers and coastal routes that could carry cargo efficiently, bypassing congested roads around busy ports and reducing greenhouse gas emissions, according to DOT officials. While we applaud the effort, the program raises some concerns, and will only be efficient—and cost-effective—if the waterfront unions have those concerns addressed.
The International Longshore and Warehouse Union has long resisted any attempt to implement a barge network in the Puget Sound or San Francisco Bay Area that does not compensate union workers for “hand-offs” from ocean carrier to inland vessel. Shippers can also bet that there will be other hidden costs involved if a new contract has to be negotiated.
Port of Oakland Expects Cargo Increases
With the recent arrival of three new container cranes from Shanghai, the Port of Oakland’s leadership is anticipating increased cargo throughput. According to Omar Benjamin, the port’s executive director, Oakland has experienced a 30 percent increase in its maritime cargo imports and an 11 percent increase in outbound cargo exports compared to this time a year ago.
“There are glimmers of economic recovery on the horizon,” he said, “and people are beginning to feel the negative news of the past several months beginning to thaw and give way to better days.”
In a letter to shippers, Benjamin also noted that Union Pacific Railroad opened its Donner Pass route located in the Sierra Nevada mountain range to domestic double-stack intermodal container freight traffic not long ago. This is designed to move cargo over a shorter, faster and more efficient route from the Port of Oakland to the rest of the country.
Meanwhile, the City of Oakland and developer AMB/CCG are working with the port to transform the former Oakland Army Base into a strategic, trade and industry center which will boost economic recovery and bring more local jobs, said Benjamin.
In a broad effort to attract new business, the Port of Oakland is also in the process of updating its strategic plan to chart a course for the next five years. “This planning process includes the Oakland Board of Port Commissioners, port staff, and our customer and community stakeholders,” said Benjamin.
As reported in Bay Crossings, Oakland also joined the five other major West Coast ports, as well as Union Pacific and BNSF Railway, to create the U.S. West Coast Collaboration. This group, while continuing to actively compete with each other for business, will collectively market the advantages of the Pacific Rim.
Maersk to Charge for ‘Ghost Bookings’
In a move certain to meet with resistance from Bay Area exporters, Maersk Line will start imposing a $10 fee for “ghost bookings.” In a letter sent to shippers late last month, the liner said shippers booking freight out of the Port of Oakland would be among the first fined.
“Overbooking as a means to overcome significant fall-down ratios is inefficient for both you and us,” stated the letter. “For example, it is inefficient and problematic for your staff that have to repeatedly deal with cancellations, changes to vessel sailings, equipment problems, and other challenges. More importantly, you might not get your cargo on the first possible vessel due to all the bookings made where the cargo does not show up. It is also inefficient for us because after the booking fall-downs, we have to sail the vessels under-utilized, which has very real economic consequences.”
The announcement comes at a time when shippers here are already scrambling to locate outbound capacity. Sources said that part of the problem is that carriers are not using the proper forecasting tools to anticipate growth. Shippers of the Agriculture Transportation Coalition (AgTC) insist that demand is ramping way up, and that vessel operators are slow to recognize the need for better deployment and more reliable service.
Maersk, among others, seemed unmoved by the effort. And while this is being described as a “pilot program,” shippers fear that other carriers will follow this example and the fees will become more punitive. Maersk is betting against that, describing it as a “Win-Win.”
“Progress will allow both parties to benefit from better predictability. We expect shippers to gain productivity and a better ensured cargo pipeline. Maersk Line will gain from fewer changes to our loading expectations, which allows for improved availability of equipment and vessel space,” stated spokesmen.
