Peak season is in full swing at the local seaports, and while record volumes of cargo are being handled without any significant problems, truck drivers are getting increasingly fed up with the long waits at the terminals.
There has been mounting pressure on terminal operators to keep their gates open longer, giving truckers more access to the unloaded containers. As it is, the gates are open from 7 or 8 a.m. until 6 p.m., and trial runs at keeping them open longer have not been successful.
As a result, lines of 300 trucks at 7 a.m. are not uncommon, and the wait can take several hours at the busiest times.
“Drivers stand in line for three hours each day at the ports without any compensation,” said Edmund Burke, West Coast coordinator of the port division of International Brotherhood of Teamsters. “The terminals have reached capacity and they don’t want to carry the costs of keeping the terminals open extra hours.”
The issue of extending the hours the terminals are open has become more pressing as the volume of imports continues to grow. At the Port of Los Angeles, imports were already up by more than 30% for the year, even before the peak season kicked in.
Costly Venture
Although ships get unloaded around the clock at the ports, the terminal operators are reluctant to bring in extra crews to staff the terminal gates, yards and offices at a cost of $2,000 to $10,000 a shift, depending on the type of operation.
Some terminal operators, such as American President Lines, have experimented with so-called “hoot hours,” opening at 3 a.m. instead of 7 a.m., but truckers did not show up at that early hour and the experiment was discontinued after a month.
“They threw a party and nobody came,” quipped Bob Kleist, an adviser with Evergreen America Corp., one of the largest ocean carriers operating at the Port of LA. “The truckers wanted 24-hour access, but nothing moved because the warehouses weren’t open 24 hours.”
Co-ordination Needed
The problem is that many warehouse and distribution operations in Southern California, where truckers deliver the merchandise, have not lengthened their hours. As a result, it makes little sense for a truck driver to pick up a container at the port at 5 a.m. if the warehouse destination doesn’t open until 8 a.m. Meanwhile, the extended hours were a financial disaster for terminal operators.
“It requires demand and volume to make that (earlier gate opening) economically feasible,” said Jay Winter, executive director of the Foreign Trade Association of Southern California. “They’re not going to open their gates and just hope that someone will show up.”
Most operators will, however, be happy to open the gate during the night if an importer has committed to picking up a sizeable container shipment at those hours.
But even longer terminal hours are not going to satisfy all truck drivers, said Burke. “Drivers can only work for 10 hours. So it becomes a question of whether they (are willing to forgo) spending any time with their families, just so they don’t have to wait in line.”
Given the fast-growing volume of containers coming through the ports, it may be just a matter of time before LA and Long Beach become 24/7 ports, like Hong Kong and other major overseas facilities.
“The laws of economics will make it absolutely necessary,” said Kleist. “The fact is that the Port of LA is investing hundreds of millions in expanding the port, through dredging and landfills, and it would be nonsense to create this expensive land and use it only 40 hours per week.”
Meanwhile, in spite grumbling from the truckers, cargo containers have been moving through without much of a hitch.
Shippers and carriers attribute the smooth flow of the record volume of goods to improved communication among the various parties, a more spread-out peak season than in previous years, and general fine-tuning of their operations.
Cautious Optimism
This year, the mood at the ports is one of cautious optimism because, with the exception of the truck drivers, everybody seems pleased with the way in which the cargo is moving.
“We haven’t seen any major problems so far,” said Al Fierstine, director of business development at the Port of LA.
To make sure their goods arrive at warehouses and stores on time, major importers like Kmart Corp., Target Corp. and Wal-Mart Stores Inc. have been more proactive in making sure that carriers and terminal operators know well in advance when big shipments from their Asian suppliers are coming in.
“Prior to the peak season, we sat down with the terminal operators to share information and set the stage about what kind of volume to anticipate,” said Rick Gabrielson, a transportation manager with Target. “We try to provide whatever information is important to them, and we let them know in advance when our drivers are going to arrive at the terminal, so that the containers can be pre-mounted on the chassis and ready to go.”
Most importers try to operate with a just-in-time supply chain to minimize the amount of time that merchandise sits on warehouse shelves. The fact that the volume of imports from Asia has been up throughout the summer hints at a growing willingness to stock up in advance for the Christmas season, rather than risk a loss of sales due to delayed shipments.
“Many importers have realized that it doesn’t serve their interest if they ship all their merchandise at the same time,” said Kleist. “So we may be in the peak season, but it’s not very much different from what it has been all summer. The fact is that they can’t ship many more containers than they have been during the past peak seasons, and the only option for them was to start shipping earlier.” n
Pettersson is a staff writer at the Los Angeles Business Journal.
