Shippers attending the Informa Cargo Logistics America conference in San Diego last week expressed concerns about new container weight regulations and the need for better port productivity in the United States.
Shippers expressed concern about new regulations about container weights, the need for better port productivity and possible changes in container flows into the U.S. at last week’s Informa Cargo Logistics America conference in San Diego.
The new requirement under the International Maritime Organization Safety of Life at Sea (SOLAS) convention that shippers provide the loaded weight of containers before their cargo is loaded on containerships “is a huge challenge,” said Peter Friedmann, executive of the Agriculture Transport Coalition, noting that the weights of containers and refrigerated units vary from company to company and even within company fleets
Friedmann said about 80 percent of the U.S. population lives in the Eastern and Central Time zones, while much of the agriculture takes place west of the Mississippi, far from population centers.
“I long for the days when the stockyards were in downtown Chicago. That would have been great. We could have had great matchback of import and export cargo,” he said. “But nobody wants to live next to stockyards. So all that agriculture stuff comes from places where people don’t live.”
Getting containers repositioned for loading with agricultural exporters is already a monumental challenge, but Friedman asked conference attendees if that could be exacerbated if more containers are shipped through East and Gulf Coast ports instead of West Coast ports, especially after the expanded Panama Canal is opened next year.
“Who is going to dray an empty box that has landed in Charleston or Savannah all the way to the Pacific Northwest? Where’s the value in that? There isn’t any. So that is our concern.”
Container availability is an issue not just for shippers in the Midwest, but even in California’s Central Valley or Eastern Washington State, or Oregon.
Friedmann said he believes monopolies are bad for business and noted that in many parts of the country, shippers have little choice in rail service other than from the four major U.S. railroads — CSX, Norfolk Southern, BNSF, and Union Pacific.
According to him, service has improved in locations where those big four railroads face competition from “disrupters” such as Canadian National and Kansas City Southern, and some members of AgTC are wondering if a potential acquisition of Norfolk Southern railroad by Canadian Pacific might actually open up new choices for routing cargo through the East or Gulf Coast.
Friedmann said he is an advocate for the idea that port authorities getting more involved in port operations, adding that they “cannot simply turn over their own future to a few terminal operators, virtually all of whom have decision makers who are not located in the U.S.”
Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, applauded efforts by port authorities to set up task forces to work for improved productivity. He noted there are groups working on this issue in the ports of New York/New Jersey, Los Angeles/Long Beach, Seattle/Tacoma, Oakland, and Houston.
“It’s great that all of you are doing this but we need to have some commonality on what is happening,” cautioned Gold, saying that while he recognizes that all ports work differently, they have many issues in common with congestion and chassis. “We need to have a good strategy moving forward working on all these issues,” he said.
A draft strategic freight policy put forward by the Department of Transportation “really doesn’t focus on what’s happening at our ports,” according to Gold.
Gold said he is hopeful that the provision to study port productivity in the new Fixing America’s Surface Transportation or “FAST” Act “will shed some light on some of the issues we’re seeing at the ports and get some basic metrics on what is happening at our ports. We’ve got a lot of anecdotal information, a lot of finger pointing blaming everybody else for the problems we’re seeing, but until we have the hard metrics to see what is happening it’s really tough to find actual solutions that are going to work.”
He added it was “astounding that some of the folks are opposed to this when really we measure everything else within the supply chain…but it seems as if the ports are kind of the black hole, you can’t get any information. I think putting these metrics out there would help improve competition — terminals would be able to measure themselves against each other and hopefully make some of these improvements.
“Unfortunately the specific metrics that were in the bill have been stripped out so now the Bureau of Transportation Statistics in DOT has to bring together a working group within 60 days of the president signing the transportation bill to work on establishing what those metrics are going to be,” he added.
“First and foremost, on labor something has to change,” said Gold. “What we went through with the negotiations in 2014-15, we can never see again.” He said the inability of the International Longshore and Warehouse Union and its employers to reach a deal “essentially shut down the economy. Granted they didn’t have a strike or lockout, but the prolonged slowdown—even though some would say it wasn’t a slowdown—the slowdowns and disruptions happened. If we had actual metric we could measure it and say this is what actually happened.”
He said the way contracts with longshoremen are negotiated “has to change” and that he was pleased the East Coast dockworker union ILA and its employers are discussing a contract extension in advance of the expiration of their current labor deal.
Shippers raise concerns about industry regulations, productivity
