Hopefully, we will have a new PMA/ILWU contract in place by the time you read this, and an industry beginning to see light at the end of the tunnel regarding port congestion in Southern California. Further hope would be that the factors causing the U.S. West Coast challenges are by now the subject of a detailed post-mortem, intended to find ways of avoiding a repeat in future.
Was it chassis, truck power, labor issues, peak volume, new alliances, increased import dwell time, railcar shortages or other issues that caused gridlock? The answer is certainly all of the above. For this reason, a solution must be multidimensional and involve all related stakeholders.
One such subset of stakeholders — liner alliance partners and their respective terminal operating subsidiaries — can do much more by improving operational coordination in the name of cost control and service. If we could make better use of scarce real estate such that terminals, berths, and on-dock rail are fully optimized, it would make a huge difference.
The results should manifest in fewer trucking drays between terminals, fewer truck moves to near-dock rail, and higher on-dock utilization. Vessels will dispatch quicker; terminal yards will become more fluid; and there will be plenty of work opportunities for labor. What is at stake is enormous — 60 percent of West Coast cargo and about 32 percent of all U.S. containerized import shipments move through Southern California.
We get ever closer to the opening the new locks of the Panama Canal, and I would expect that stakeholders such as railroads, ports, operators and labor will take necessary action to remain sustainably competitive.
The U.S. stevedoring industry is in need of consolidation to reduce cost as part of an objective to become sustainably profitable. In the trenches, 2015 again looks to be another year of survival of the fittest.
W. Patrick Burgoyne, President and CEO, Ceres Terminals