Largest terminal at Long Beach, California port won't open Monday after getting hit by labor turmoil
- TTI, the largest terminal in Long Beach, canceled all trucking orders for both imports and exports on Monday
- The longshoremen called "dailies" who fill in daily positions are not showing up for work at the ports of Los Angeles and Long Beach; steady longshoremen (senior employees who are on staff) reported for work Friday and Saturday
- No union workers showed up at the Port of Oakland on Friday and Saturday
- Reports spread that union workers are "red tagging" equipment to take it out of service for safety reviews, creating congestion and slowing down work
The largest terminal operator at the Port of Long Beach, California told truckers Sunday it will close for both the day and night shifts on Monday, according to an email obtained by CNBC. Ports and workers are locked in an unofficial dispute over wages, as well as safety, automation and pension benefits.
The notice was sent by Total Terminals International (TTI), the largest terminal in Long Beach and a unit of MSC.
"Port of Long Beach cargo has been moving through the terminals and we do expect the commitment by the parties to continue and encourage the parties to put [a] full faith effort for a final resolution," said Mario Cordero, executive director of the Port of Long Beach.
But Matt Schrap, CEO of the Harbor Trucking Association, said that receiving such an alert on a Sunday is unusual and that, despite the advance notice, it could worsen congestion.
Harbor Trucking Association, a coalition representing intermodal carriers who move containers at the west coast ports, told CNBC that policies at each terminal at every port vary, so if one terminal allows trucks to enter and pick up containers left stranded on Friday, other terminals won't necessarily follow. Longshoremen prepare the containers for each day's pickup.
"To put it lightly, gate disruptions make it difficult for our members to plan and deploy truck capacity," said Schrap. "Unfortunately, we don't know which terminals are going to limit or shut down operations until it is happening and, at that point, it is oftentimes too late to react, since trucks are already dispatched for the day."
West Coast ports this weekend have seen both longshoremen fail to show up to work, as well as "dailies," those members who fill in the schedule to complete the workforce.
"The ripple effect of these moderate stoppages will push us further and further back in picking up containers where we will need two to three more truckers to clear out" the congestion, warned Paul Brashier, vice president of drayage and intermodal at ITS Logistics. "This will be really bad for our clients, which are the shippers and the truckers, because the extra labor costs will be tacked onto their bill as well as any extra detention penalties. Those extra costs will then be passed on to the consumer."
No longshoremen have reported to work at the Port of Oakland since Thursday.
"We continue to monitor the situation closely and we hope this is resolved soon, so that the flow of commerce can continue," said Robert Bernardo, director of communications for the Port of Oakland. "Especially just as we are seeing cargo volumes improve" and more vessels come back into service, he added.
At the ports of Los Angeles and Long Beach, no dailies reported for work on Sunday. Since the volume of containers moved over the weekend is lower compared to during the week, some truckers were able to pick up containers, not drop them off.
Allegations have grown that members of the International Longshore and Warehouse Union have "red tagged" equipment for safety checks, removing it from service. The ILWU declined to comment to CNBC.
"One kink at one terminal will gum up a whole day and reverberate well beyond that single shift," Schrap of Harbor Trucking added. "If an entire complex is shut down, the wrench that gets thrown into the gears not only disrupts that particular day's activity, but the residual impacts take days to dig out from since new appointments need to be made, schedules need to be modified and customers have to adjust receiving schedules."
Trucking companies operate most efficiently when their drivers make a "dual transaction" involving dropping off and picking up a container on the same day.
The Port of Los Angeles, the nation's largest port, processed 2.5 million containers from January through April.
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