Two Recent Conferences Highlight Port Challenges

Another indication of how U.S. ports are paying closer attention to shippers' needs was signaled by the Port of Oakland last month as it announced its new update service.

By Patrick Burnson

Published: May, 2015

Another indication of how U.S. ports are paying closer attention to shippers’ needs was signaled by the Port of Oakland last month as it announced its new update service.
 
Beneficial cargo owners are being aggressively courted by port authorities nationwide in an effort to secure their business and attract new carrier calls. The latest example of this trend is “Port of Oakland Today,” a daily blog post listing terminal and berthing information, available at www.portofoakland.com/newsroom/dailyblog.aspx.
 
This development comes at a time when Oakland has been reaching for vessel operators to make its gateway the first port of call. At last month’s Bay Planning Coalition’s 2015 Decision Makers Conference, Oakland’s Maritime Business Development Manager Beth Frisher said shippers should regard the port as a full service logistics center.
 
Currently, a 360-acre trade and logistics center is being built by the port and City of Oakland on the former Oakland Army Base. “It’s envisioned as a magnet to attract additional import and export cargo,” said Frisher.
 
Also underway is a railyard at the site to be followed by new transload warehouses. When completed, commodities shipped in bulk will be able to be transferred to containers for export out of Oakland, and imports will be transloaded into 53-foot domestic containers and then placed on rail cars for inland shipment.
 
Frisher said that the new capabilities could convince shipping lines to make Oakland their first U.S. call. All the top container carriers have weekly services in Oakland now, but stop first in Southern California.
 
Two other projects in the planning stage are expected to generate more cargo growth, Frisher added. One is a cold-storage facility; the other is a grain transload operation. Both would permit bulk shipments of agricultural products such as beef and grain to be transferred from rail to containers for overseas delivery. “With these facilities and our Class I rail connections, we’re providing a direct link to the farm belt,” Frisher said.
 
Cargo growth at the port should translate into increased jobs for Oakland. More than 73,000 jobs are already linked to the port’s three businesses: the seaport, Oakland International Airport and commercial real estate holdings that include Jack London Square. It is estimated that every 1,000 additional containers moving through the port create eight more jobs.
 
Growing the Bay Area’s maritime and industrial economy sustainably is the focus of the annual Decision Makers Conference. “As stewards of the Oakland waterfront and San Francisco Bay, we will continue to build our businesses responsibly and view everything we do through an environmental lens,” said Richard Sinkoff, the Port of Oakland’s director of environmental programs and planning.

Oakland Mayor Libby Schaaf opened the conference. Scheduled speakers included Congressional representatives Jared Huffman (D-San Rafael) and John Garamendi (D-Fairfield).

 

Navis World Conference Confronts Waterfront Challenges

Despite great strides in mechanization and technology, many U.S. ports and terminals remain challenged by political conflicts, internecine competition and internal communication issues. Local shippers attending Navis World 2015 in San Francisco last month were provided with a broad overview of the challenges ahead during a session called “Carrier, Terminal Collaboration: Room for Improvement.”

“There are a lot of silos and special interests in the port community that get in the way of true collaboration,” said John McLaurin, president of the Pacific Merchant Shipping Association. “While labor, management and shippers may be on the same page with some issues, there can only be consensus when everyone has skin in the game.”

As an example, McLaurin said that the National Retail Federation’s (NRF) call last year for a suspension of PierPass fees in Southern California was unrealistic. The NRF and other shipper associations were also off the mark, McLaurin said, in their appeal to have dockside labor and management factions come to an immediate resolution to contract negotiations or be threatened by an executive action.

“We all agree that having a contract should be the objective,” said McLaurin, “but the shippers provided no direction on how to achieve this. The ‘chassis inspection’ issue was never addressed, and other elements were hardly considered.”

Greg White, senior vice president of Ports America, agreed, noting that federal and state government officials were right in permitting the International Longshore and Warehouse Union and the Pacific Maritime Association to retain ownership of the bargaining process. “This is a procedure that is designed to work out the details,” he said. “Then they can focus on a long-term relationship.”

The cooperative nature of ocean carrier alliance relationships was also brought into question when White noted that some “misbehavior” could be expected when terminal sharing was involved. “We have to realize that while carriers are working together to take advantage of economies of scale, they are also competing for business. That hasn’t changed.”

Finally, the quality of data being shared in the alliances may also need to be refined. White noted that the “truthiness” of KPIs (Key Performance Indicators) is still regarded with suspicion. “Vessel polarization prevents flexibility, and limits the levels of engagement,” he said.

Patrick Burnson is the past president and current board member of the Pacific Transportation Association, based in San Francisco. www.pacifictrans.org