If shippers thought Halloween was scary, they only had to wait a few days to realize what real horror was. The month of November got under way with a bang—literally—as a number of inbound refrigerated containers exploded at three different ports on the West Coast, killing three mechanics.
By Patrick Burnson
Published: December, 2011
If shippers thought Halloween was scary, they only had to wait a few days to realize what real horror was. The month of November got under way with a bang—literally—as a number of inbound refrigerated containers exploded at three different ports on the West Coast, killing three mechanics. While the Port of Oakland was spared, dockworkers refused to work on vessels carrying suspect boxes.
Maersk Line, which is part of the World Shipping Council’s Safe Transport of Containers Working Group, first brought attention to the fact that four reefers coming from Southeast Asia had exploded for no apparent reason.
“North American-based shipping industry officials, in conjunction with governmental agencies including the United States Coast Guard, have conducted a comprehensive review to determine the source of the problem and isolate and repair at-risk containers,” said Jim McKenna, president of the Pacific Maritime Association (PMA).
McKenna added that all indications pointed to maintenance work conducted on refrigerated units processed at the Port of Kat Lai in Vietnam as the culprit. As a precaution, all refrigerated containers that were either transported through or originated in any port in Vietnam were being identified upon arrival at West Coast ports in the United States and those that have been worked on in Kat Lai isolated for special handling.
“The PMA is working with the International Longshore and Warehouse Union (ILWU) locals along the coast on agreements that protect workers while keeping the ports operating. Already, an agreement at the nation’s largest port complex in Southern California is in place, and the PMA continues to work with locals at other ports, including Oakland,” said McKenna. “Employee safety and well-being are our top concern.”
Occupy Oakland Disrupts Port Operations
Meanwhile, ongoing Occupy Oakland demonstrations in November shut down the port’s TraPac terminal, warehouses and other major deconsolidation centers. For Devine Intermodal, a major San Francisco Bay Area drayage company, the problems had reached a critical stage.
“Every day for the past two weeks, at least one terminal has been shut down,” reported a Devine statement. “The resulting congestion is reminiscent of the prelude to the 2002 lockout.”
The “lockout,” shippers may recall, was an ongoing labor/management dispute that caused a major ocean carrier diversion away from the West Coast. As a consequence, many major manufacturing and retail supply chains were permanently reconfigured to mitigate risk.
In a letter sent to its shippers, Devine declared, “our hands are tied; our productivity negatively impacted.”
Across the bay at the Port of San Francisco, the same concerns were expressed. “While some threat did exist for us, none of our cargo operations were affected,” said Jim Maloney, the port’s maritime marketing manager. “We were more worried about finding adequate numbers of longshore workers.”
Slight Drop in Imports Reported at Oakland
Finally, news that the Port of Oakland saw imports drop for the second consecutive month is causing concern for local agricultural shippers. They are worried that trans-Pacific capacity, due to weak imports, will limit outbound space.
According to the Agriculture Transport Coalition, shippers are scrambling to secure contracts now to avoid a loss of transport options when the spring peak season for exports arrives. If there is any good news to report, it is this: most Coalition members said that rates will remain flat in 2012, and they don’t expect a price hike until late next year.
Although analysts at San Rafael-based Beacon Economics expect continued gains in California’s export trade through the remainder of the year, they warn that the rate of growth is apt to slow.
A possible harbinger of that trend could be seen in a slight 1.5 percent fall-off in the seasonally-adjusted value of California’s exports from August to September, although Beacon Economics advises against reading too much into monthly variations in the data.
“Make no mistake: There will be growth in California exports, but just not at the pace we might prefer,” economists said.
