Two recent announcements indicate that Bay Area shippers will likely enjoy peace, prosperity and tranquility in the coming years.
Port of Oakland maritime officials anticipate a five-year run of record cargo volume beginning next year. Photo courtesy of the Port of Oakland
BY PATRICK BURNSON
Published: September, 2017
Two recent announcements indicate that Bay Area shippers will likely enjoy peace, prosperity and tranquility in the coming years.
First, Port of Oakland maritime officials anticipate a five-year run of record cargo volume beginning next year. By 2022, the port expects to handle the equivalent of 2.6 million 20-foot containers annually. This represents an eight percent volume increase over what the Port of Oakland has ever processed in a single year. The figures appear in a “Strategic Maritime Roadmap” released by the port this month.
This blueprint for the future foresees increased cargo volume arriving at Oakland on larger ships. Northern California’s “booming” freight market will drive the growth, the port said. New logistics capabilities, such as distribution centers and freight transfer facilities, should provide a further boost, it added.
Walter Kemmsies, an economist at JLL’s Port, Airport and Global Infrastructure group, said that Oakland is becoming an even stronger port of outbound cargo. “And that’s where the future is,” he said. “There is growing evidence that U.S. exports are going to be an ever more vital part of our global trade strategy. Oakland is a key player in that sector.”
Oakland’s Maritime Director John Driscoll agreed, noting that the port is serving a thriving area and developing new services for shippers. “The combination should be positive for everyone who relies on the port for their business or their job,” he said.
The port’s roadmap forecasts record volume of more than 2.4 million cargo containers in 2018. The current record is 2.39 million set three years ago. The port said it anticipates steady growth—and new volume records—for the next five years.
The port predicted that vessels arriving here would be 35 percent larger within 15 years. They’ll carry up to 18,000 containers, reducing the number of ships needed in Oakland. That should help mitigate the impact of cargo growth. “Fewer ships means fewer diesel exhaust emissions,” observed Mike Zampa, the Port of Oakland’s director of communications.
The port said its new logistics developments will rise near rail lines to reduce the reliance on trucks. That’s expected to further curb diesel emissions.
Oakland’s roadmap also includes a commercial strategy calling for:
• Growing business from local and regional markets;
• Remaining the top export gateway for Central Valley growers;
• Increasing U.S. Midwest meat and grain exports;
• Attracting containerized cargo to a new refrigerated distribution center and to the 440,000-square-foot first phase of its Seaport Logistics Complex;
• Increasing to 15 percent the amount of import cargo that arrives in Oakland and is loaded to the rails for inland distribution;
• Attracting more automotive imports; and
• Making Oakland the first U.S. port of call for at least one vessel service originating in Asia.
Three Years of Waterfront Labor Peace on the Horizon
With voting by longshore workers complete, 67 percent of International Longshore and Warehouse Union (ILWU) members agreed to a three-year contract extension with the Pacific Maritime Association (PMA).
This contract extension, which was the first of its kind, covers workers at all 29 West Coast ports. The contract, previously set to expire in 2019, will be extended to July 1, 2022. Following the favorable vote, the extension was formally confirmed by the ILWU in early August.
PMA President James McKenna was relieved. “Earlier this year, PMA proposed a contract extension with the intent of creating long-term certainty for West Coast ports and all stakeholders,” he said. “The voting shows strong ILWU support for our proposal, which will ensure labor stability through 2022. This historic agreement is great news for the maritime industry, as well as our customers, workers, port communities and the U.S. economy.”
Logistics managers were also assured that with this contract extension, the West Coast waterfront has a tremendous opportunity to attract more market share and demonstrate that our ports and our workforce are truly world class.
“We are fully committed to delivering the highest standards of reliability and productivity for years to come,” said the PMA in a statement.
Meanwhile, McKenna looks forward to working with ILWU President Bob McEllrath in the months ahead to ensure that the West Coast sets the standard for service and efficiency, and is the destination of choice for cargo entering and exiting the United States.
Port of Oakland Executive Director Chris Lytle also praised the development. “This shows that the West Coast means business when it comes to moving cargo for our customers,” he said. “We’re the most efficient, timely and cost-effective gateway for international trade and with a contract extension, we’re also the most dependable.”
Lytle noted that a contract extension “would ease concerns” about labor-management disputes that can arise when waterfront contracts are negotiated. “Since the last West Coast contract was signed in 2015, labor relations have been good and productivity high,” he said. “We feel that a decision to extend the contract reflects improving relations and performance up and down the West Coast.”
Patrick Burnson is the executive editor of Logistics Management. www.logisticsmgmt.com
