Marine Transportation System

Posts Tagged ‘California’

Port Performance Under the Microscope

In Congress, Labor, Legislation, Ports on September 1, 2015 at 5:07 pm

I last wrote of how Washington policy makers and agencies grew more interested in the port sector and how ports, small and large, benefited by that attention. So let’s consider some recent and largely unwelcome attention.

The messy, prolonged West Coast contract talks and negotiating tactics that resulted in a dysfunctioning supply chain at the waterfront elicited a strong and prolonged backlash from the importers, exporters and others whose own operations depend on reasonably well-functioning ports. (“After all, shippers crave certainty, and they crave reliability,” the recently released Pacific Maritime Association annual report acknowledges.) Not that the shippers were taken by surprise. With the 2002, ten-day shutdown of the ports fresh in mind, they expected the worse and were diverting some cargo to gateways of other coasts (or countries) months into the talks.

You are familiar with the recent history. The talks between the PMA and International Longshore and Warehouse Union started in May 2014. A year later the ILWU rank and file gave the new contract its final approval. In between is where it got interesting and “port congestion” came to be reported in main stream media. Management pointed to the intentional shorting of the workforce by union leadership. The union countered saying the terminals brought the problem on themselves by not being prepared for big ships with more cargo. In any event, port congestion was amplified at the largest Pacific gateways.

Export apples were not making it overseas markets in time. Retailers decried the slow flow of their freight from ship to gate and finally to shelves. But first the ship had to get to berth. By February, when the tentative agreement was reached, there were over 30 ships waiting at anchor off Los Angeles and Long Beach. POLA executive director Gene Seroka told the Wall Street Journal that he expected “it will be about three months before we return to a sense of normalcy.”

Over the nine months that the negotiations were underway the cargo interests were active and vocal. A coalition of companies and trade associations formed and periodically met with and issued joint letters to policy makers. They asked for intervention or at least for official Washington to pressure negotiators to make it quick. Their major complaint over time was that President Obama was just, in the White House’s word, “monitoring,” not acting. Members of Congress eventually expressed their concern about the effect of the prolonged talks.

Meanwhile the Port of Portland had its own particular low productivity problem where a continuing multi-year dispute, if anything, wasn’t helped by the prolonged contract talks. By February, a frustrated Hanjin Shipping announced it would end service there, leaving Portland and its ICTSI terminal operator in search of a willing container line.

Leading up to and long after the conclusion of the contract talks the shipper community lobbied for “a tool that will help provide certainty to future negotiations.” Letters seeking legislation to provide that tool typically would carry over one hundred organizations’ names. Some bills eventually were introduced. But from the perspective of most ports, the bill represents more problems than potential solutions.

Congressional advocates for the cargo interests have taken two approaches in their legislation. The first to emerge was the “Port Performance Act” (S.1298) by Senator John Thune (R-SD). He chairs the Commerce, Science & Transportation Committee that eventually approved the measure. Noting that the port sector had yet to be plumbed for the sort of “condition and performance” data that Congress and transportation planners say are needed to better evaluate the national freight system, Thune’s bill prescribes the annual collection of monthly terminal operations data. It’s the sort of data that terminal operators keep for themselves to improve terminal functions and that port authorities are reluctant to have out there to be used by the competition. In the version that ultimately was approved as a provision in the Senate’s surface transportation bill is the requirement for data on vessel, train and truck time in port, lifts per hour, and cargo dwell time. Those and other metrics are required to be used for the annual reports to USDOT.

What is not in the Senate-passed bill is a provision, original to S.1298, that would require monthly reports of port performance data to USDOT and Congress during collective bargaining periods when contracts have expired. Organized labor and ports don’t like the bill and the unions lobbied especially hard to have that particular provision excised.

The other type of bill that was introduced—first in the Senate and more recently in the House—would amend labor law. Whereas Thune’s Port Performance Act is premised in part on the idea that data would be useful in documenting when port cargo operations and cargo interests suffer during contract negotiations, the other legislation is to provide a means to engage the government and the courts in bringing closure to prolonged negotiations i.e., a market for that data.

Freshman Senator Cory Gardner (R-CO) introduced his “Protecting Orderly and Responsible Transit of Shipments (PORTS) Act” (S.1519) to amend the Taft-Hartley Act to make slowdowns an unfair labor practice and empower governors to initiate boards of inquiry and seek court injunctions. (The House version was introduced in July by Dave Reichert (R-WA) and others.)

Senator James Risch (R-ID) takes a somewhat similar approach to the Gardner bill, with added inspiration from the Portland terminal operator who wants parties responsible for slowdowns to be penalized. Risch’s “Preventing Labor Union Slowdowns (PLUS) Act” (S.1360) makes slowdowns an unfair labor practice, defines slowdowns, declares US policy as one to “eliminate the causes and mitigate the effects” of port disruptions, and prescribes penalties for violators including decertification of labor organizations.

So what are the prospects for these bills in this Republican-led Congress? Amendments to labor law are sought by Republicans and opposed by Democrats. While the former has solid majorities in both chambers, the latter is in a position to slow and stop bills in the Senate where 60 votes routinely are needed to assure passage of just about any bill of substance. We may see hearings on the PORTS and PLUS Act legislation, and we definitely will see GAO reports—already requested—on the economic consequences of the West Coast talks. But between the Senate rules and the Democrat in the White House (see Secretary Perez comments), those bills will have trouble becoming law, perhaps even getting floor time in Congress.

Thune’s Port Performance Act is quite another matter. The diluted version of the bill passed the Senate, tucked away in the 1024-page, appropriately labeled DRIVE Act (H.R.22). It is the Senate’s version of a must-pass highway and transit bill. Key House legislators have yet to weigh in on the issue of port performance metrics and data collection, much less produce their own 6-year transportation infrastructure bill. Some action on the larger bill is inevitable, perhaps to the point of becoming law.

When the House side takes up the question, cargo interests will again point to the West Coast experience and seek restoration of frequent data reporting during contract talks. Port interests will explain why the Thune language is generally impractical and unwelcome. Labor will ask the House transportation leaders to flatly oppose the entire Port Performance section that is in the Senate passed bill.

More to come on this matter of the performance and condition of ports, and how and whether to measure it.   Pbea

Two Trust Funds in Search of a Solution

In Infrastructure, MTS Policy, Ports, Water Resources on October 25, 2012 at 3:31 pm

Yesterday Tennessee Senator Lamar Alexander (R) stood near Chickamauga Lock in Chattanooga and said, “We have two trust funds to deal with waterway infrastructure like the Chickamauga Lock, and neither of them works.”  He tells the truth.

The senator and former governor convened a presser to preview legislation–the American Waterways Act–that he and others will introduce when Congress resumes its session after the November election. The still in draft bill would tackle some financially challenging issues because the Inland Waterways Trust Fund (river system) and the Harbor Maintenance Trust Fund (for the most part coastal ports) are both at the center of current navigation infrastructure problems and the ultimate solutions to those problems.

The IWTF fund, with collections from a fuel tax on commercial vessels operating on the inland system, raises insufficient funds for what is a large, backlogged demand for lock and dam construction and rehab work. The users of the system have proposed changes in cost-sharing as well as increases in the fuel tax.

As has been discussed elsewhere in MTS Matters the Harbor Maintenance Trust Fund is a problem of a different kind. The ad valorem tax on cargo raises sufficient funds to cover the nation’s channel maintenance requirements but the Administration and Congress do not spend O&M funds at a rate commensurate with collections. The crafters of the planned bill are said to be working on how to assure annual appropriations at full-use levels as well as to free the accumulating surplus–now above $7 billion–for port projects.

The greatest challenge in drafting the legislation is the high hurdle presented by congressional budget rules. Based on what we have heard, the drafters intend to enable  the spending of tens of billions of dollars for construction and maintenance work over a 5 to 10 year period.  Even if the existing and future collections from the fuel and cargo taxes can handle that, as is the plan, Congress would have to effectively waive budget rules to get past procedural barriers. That doesn’t happen often. Moreover, it would require consensus among the key actors and probably a majority in the House and a super-majority in the Senate.

And while there has been significant growth in the ranks of advocates on these issues, solutions to the IWTF and HMTF problems have yet to achieve that kind of consensus.

The AWA–if it isn’t premature to assign an abbreviation to a measure not yet introduced–would have other provisions.  Senator Alexander identified these:

  • address regulatory and permit process streamlining projects by adopting the MAP-21 approach to speeding projects;
  • shift the 50/50 cost-sharing requirement for coastal channel maintenance from 45 feet to apply to those channels deeper than 50 feet;
  • open the HMTF to now ineligible port projects, to include landside projects (especially to satisfy ports like Los Angeles that don’t have much in the way of O&M dredging needs);
  • authorize a 5-year construction program to advance projects to deepen ports to accommodate post-panamax ships needing around 50-foot depths (to include Charleston and other planned deepenings that meet the present 3.0 benefit/cost test);
  • make the increasingly expensive Olmsted Lock project on the Ohio River a fully Federal responsibility, which would free IWTF resources to start other waiting construction projects; and
  • require the Federal government to follow the Inland Waterways Capital Development Plan developed by the industry and Corps of Engineers for an increase in the fuel tax and a 20-year schedule for projects.

The guts of the Inland Waterways Capital Development Plan were put into legislative language found in HR 4342, the WAVE 4 Act,  introduced earlier this year byRep. Ed Whitfield (R-KY). Worth noting, the Administration put forward a different proposal to address the ITWF problem and had been at loggerheads with the industry with no agreement in sight.

The likely sponsors of AWA are from both parties and will include principal sponsors Lamar Alexander and Lindsey Graham (R-SC), plus others who may include Dianne Feinstein (D-CA).  Feinstein and Alexander are the lead senators on the appropriations subcommittee that funds the civil works program.

Why are senators talking about introducing a controversial reform bill soon before the 112th Congress comes to a close? There are several answers, one of which is that the House and Senate are preparing to tackle major fiscal and revenue decisions (see “fiscal cliff“). Resolving the navigation trust fund problems could be made easier as part of the larger debate.  Also, as I mentioned in The WRDA Mantra post, an effort may be made to move water resources legislation (WRDA) during lame duck.  The AWA is squarely in WRDA territory and Alexander needs to be ready to jump on-board even if the odds of WRDA advancing are slim to none.  Push come to shove, the senators who introduce the AWA bill this year will be staking claim to the issue in the next congress.

Let’s face it.  The American Waterways Act, as it has been developing in the months leading up to Senator Alexander’s announcement, is an extremely ambitious package.  It will entail getting Congress to approve significant hikes in commercial navigation project spending, increase the fuel tax, venture into the touchy subject of expanding uses of the HMTF, and streamline permitting on some water resource projects that have been a favorite target of environmental conservation organizations…none of which are reasons to put a halt to such ambitious foolishness.

Said Lamar Alexander yesterday, “The Harbor Maintenance Trust Fund collects a lot of money, but doesn’t spend it well. The Inland Waterways Trust Fund doesn’t collect much money, but spends it well. This bill would fix the way our ports and waterways are funded so that we can meet the challenges they face…”

Here’s a challenge for a do-something Congress.  Pbea

Green Move at FMC

In Environment, Green Transportation, Ports on January 8, 2010 at 2:49 pm

The Federal Maritime Commission has formed a Maritime Environmental Advisory Committee.  This isn’t fresh news–the FMC announced the action last November–but it’s still worth noting.

It is a smart move by Chairman Rick Lidinsky.  He announced it, appropriately so, while on a visit to the San Pedro Bay ports.  Says the FMC press release: “I wanted to recognize these ports’ leadership in demonstrating that the maritime industry can remain commercially competitive while acting in a manner consistent with the country’s commitment to energy independence and environmental standards.”  While those two largest of US ports have led the way in greening seaport operations the Lidinsky comments were a particular reference to the ports’ more recent Clean Trucks Program. It was his way to demonstrate the agency’s new leadership.

The program–in conjunction with the efforts of an enlightened shipper community–has been very successful in reducing port drayage trucking diesel emissions by a praiseworthy 80 percent.  Doing it well ahead of schedule.  The program has inspired similar action in other parts of the country and, with the exception of one particular element, has the strong support of both public and private interests.  (The exception is the controversial “employee driver” provision in the Los Angeles plan that is being challenged by the American Trucking Association in court.)

The formation of the FMC panel followed by several months a decision in the FMC to halt its action against the ports of Los Angeles and Long Beach.  Their joint action raised technical issues under the Shipping Act and that prompted an FMC complaint in court as well as the decision to start an FMC enforcement investigation.   (The environmental objectives of the  clean trucks program were not challenged.)   The decision to withdraw the complaint took place before Lidinsky’s arrival at the FMC.

The bid in court  proved unproductive.  I’ve not the training to judge the merits of the  complaint.   But I do know that the new chairman–a sharp fellow–knew what he was doing when he asked his staff what was their understanding of the environmental issues that color and confront maritime related activity in the United States today.

On learning the answer Lidinsky took action.  A Maritime Environmental Advisory Committee was formed.  Strictly an internal panel, the press release notes that the staff committee’s purpose is “consistent” with Obama administration policy for the development of “green jobs”, etc.  A reference to creating jobs is de rigueur for a government  press release these days, likewise an ethos statement on seeking “a more sustainable approach to maritime issues.”

On a more basic level, however, the new advisory committee would help the commissioners understand what is going on in the maritime realm and tune the agency’s work–its deliberations and services–to what is an undeniably changed environment–regardless of the party in power–in which business and government now has to operate.  And smartly so.   Pbea

Hours on the Road, Time on the Water

In Marine Highway, Surface Transportation Policy on November 6, 2009 at 5:59 pm

The rules of the road will help define the market for marine highway services.   A prime example is the Hours-of-Service (HOS) regulation that limits the time truck drivers can spend behind the wheel.  These are excerpts from American Shipper of October 29, 2009.  (The links are mine.)

The U.S. Department of Transportation and its Federal Motor Carrier Safety Administration on Monday agreed to revisit rules on hours of service for truck drivers to resolve a lawsuit by safety advocacy groups and the Teamsters union.


The hours-of-service rule allows drivers of commercial vehicles to drive up to 11 hours after 10 consecutive hours off duty. The rule also has a 14-hour maximum workday limit so that drivers have to clock off even if they haven’t driven all 11 of their allowed hours. And drivers must take a 34-hour break after being on the job seven or eight consecutive days.


The trucking industry objected to the original changes five years ago, which added an extra hour to the maximum time behind the wheel but shortened the overall work day and the restart period, but has since adjusted to and supports the current rule.

Trucking companies comply with Federal requirements and adjust operations accordingly.  One adjustment may be in how they schedule drivers for long hauls.  If the daily allowable driving time is reduced under revised HOS regs then one response could be to substitute vessels for a long leg of the long haul.  Instead of dispatching a driver for the full trip put two drivers to work on the short hauls between the origin/destination points and the ports at either end.

The authors of “Operational Development of Marine Highways to Serve the U.S. Pacific Coast,” which recently appeared in the Transportation Research Record (September 2009), see that potential.

Marine highways are viable for longer routes such as those from California to the Pacific Northwest, where truck rates are higher and both distance and trucking hours-of-service regulations permit vessels to be time competitive at lower speeds. (from the abstract)

One of the authors is Ron Silva of Westar Transport, a California trucking firm that understands the operational benefits of  a transportation system that would make it possible for trucks to spend time on the water.   Pbea

Transformational Transportation, Part 2

In Green Transportation on July 31, 2009 at 11:21 pm

Persons famliar with Secretary LaHood’s meeting with public and port officials in Oakland tell me that folks might be surprised to know which California official was most enthusiastic  about the prospects for Bay Area marine highway service.  Among those at the meeting were two California cabinet members (Food & Agriculture and Business, Transportation & Housing) and the director of Caltrans.

The Eco Transport project has been in development for a few years.  The business plan is to reduce the need for  truck moves into Oakland by deploying barges to move containers between Oakland and the Ports of Stockton, initially, and Sacramento.  The company notes that such an operation also will make unnecessary a great many empty container moves and the associated costs of fuel and exhaust.   Export containers could be loaded heavier in Stockton because they would not have to meet road weight restrictions.  And carbon counters are sure to like the shrinking of the significant carbon footprint of trucks carrying imports into the central region, and California exports to Northern California’s principal international gateway.  Indeed the company has done its due diligence to substantiate the environmental benefits of their new marine highway service.  And the result has been the endorsement of regional and State air quality agencies.

So which official at the meeting revealed great eagerness and anticipation about the green barge service?  It was Food and Agriculture Secretary A.G. Kawamura.  He and the growers/shippers of the Central Valley are enthusiastic about the prospects for barges carrying goods to Oakland and then on to a ship for the export market.  And when a shipper is looking forward to taking  its goods to the water that’s a very encouraging sign.

LaHood: Marine Highway as Transformational

In Ports on July 27, 2009 at 2:24 pm

DOT Secretary Ray LaHood was in Oakland on July 2nd talking freight and ports.  He was importuned by local, State and Federal office holders about the need for a national goods movement policy.  He was told that infrastructure improvements strengthen the capacity of ports to serve the nation.  He  heard them say there’s a need for equity among West Coast ports.   He volunteered that a California “ports czar” might be what’s needed.  (Although that may not be what the folks in Oakland have in mind.)

He also reiterated his view that marine highway development should be realized and would be “transformational.”  His tweet from Oakland: “US ports provide transportation for the 21st century.”

The key to creating more environmentally friendly ports, LaHood said, is to transport more goods by ship rather than trucks. He mentioned, in particular, the importance of a “marine highway” along the West Coast. “We will be putting a good deal of emphasis on the marine highway in order for us to get trucks off the road and get cleaner air,” LaHood said. (Source: Chris Metinko, Oakland Tribune)


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