Dockworkers forge strategic alliance with Panama Canal pilots

The union representing West Coast dockworkers has formed an alliance with pilots who guide ships through the Panama Canal, a link-up that could boost the bargaining power of both unions.

The International Longshore and Warehouse Union, which represents 50,000 West Coast longshore and other workers, as well as others in the U.S. and Canada, has been concerned about the potential loss of cargo, jobs and collective bargaining power that could occur when the Panama Canal expansion opens in 2014.

The affiliation between the two unions strengthens labor’s hand because the two organizations would honor each other’s job actions, the unions said.

Harley Shaiken, a UC Berkeley professor specializing in labor issues, described the alliance as “a ‘wow’ moment” that could greatly increase the collective bargaining power of both unions.

“There has been a lot of talk about unions needing to have a much more global vision,” he said. “This is one of the few times that the talk has been put into action.”

ILWU International President Bob McEllrath said the affiliation “will provide a new level of strength and unity for workers in both organizations.”

“Our goal is to hold global companies more accountable to workers and their communities,” he said.

Londor Rankin, who serves as secretary general of the Panama Canal Pilots Union, said his group voted “overwhelmingly” in favor of creating a formal relationship with the San Francisco-based dockworkers union.

“We will learn from the dockworkers and they will learn from us, and we will mutually support each other,” Rankin said. “The companies that move cargo are global. We must have the same kinds of alliances and connections.”

The 250-member pilots union represents a profession as old as the maritime industry itself. Pilots are the short-haul navigation experts who usually take control of ships from their sea captains to negotiate the local harbor routes that lead vessels to dock and then back out to sea.

But the Panama pilots have a different task. They negotiate the grueling 12-hour, 48-mile canal route that links the Pacific and Atlantic oceans.

Some inside the dockworkers union have been pressing privately for early talks on its next labor contract with the Pacific Maritime Assn., the negotiating body that represents some of the world's largest ocean cargo lines and terminal operators.

The thought was that West Coast dockworkers needed the next contract in hand early to persuade port customers to continue moving cargo through West Coast ports rather than using the widened Panama Canal to head to East Coast harbors.

The current labor contract expires 2014, and no negotiations have been scheduled on a new contract. Officials from the Pacific Maritime Assn. didn’t return calls seeking comment Friday.

Meanwhile, the dockworkers union is locked in a dispute with a grain terminal operator at the Port of Longview in southern Washington state. The union has accused the operator of reneging on an agreement to hire union labor. The dispute erupted this summer into picket lines and the arrests of some union members.

Shaiken, the professor, said the new alliance wasn’t necessarily an escalation that would lead to more tensions between labor and management. It might help ensure that both sides negotiate in good faith, since neither would hold an upper hand in threatening to shift cargo or stop work.

“It could lead to improved relations rather than to more conflict,” Shaiken said.

RELATED:

Cargo traffic declines in August

Los Angeles heads for record export year

-- Ronald D. White

Photo: At dawn, cranes await traffic at the Evergreen Terminal at the Port of Los Angeles, one of 29 West Coast ports served by the International Longshore and Warehouse Union and the Pacific Maritime Assn. Credit: Bob Chamberlin / Los Angeles Times

Port cargo numbers feed fears of slowing economy

Cargo traffic at the nation's busiest seaport complex was down in August compared with the same month in 2010, suggesting that the sluggish U.S. economy has caused retailers to order fewer goods to sell this holiday season.

At the Port of Los Angeles, which is the No. 1 ranked port in the nation in terms of volumes, imports fell 5.75% compared with August of the previous year to 376,190 cargo containers. The big bright spot was exports for Los Angeles, which rose nearly 25% to 184,232 containers compared with a year earlier.

The Port of Los Angeles is on course for a record year of exports, but that was largely the extent of the good news. At the neighboring Port of Long Beach, which ranks second only to Los Angeles in terms of volumes, imports fell 14.2% to 267,198 containers compared with a year earlier. Exports through Long Beach were also down 3.8% to 121,277 cargo containers compared with the same month in 2010.

In 2010, August was the best month for the ports in an unusual, post-global recession year in which retailers were ordering lots of products to replenish record low inventories. But this year is still a question mark.

"Retailers appear to be somewhat cautious going into the holiday season. We'll know more as we see the September and October numbers," said Los Angeles port spokesman Phillip Sanfield.

Jock O'Connell, an economist for Beacon Economics, said that retailers might be hoping to keep inventories lean enough to be able to demand top prices for their goods rather than leave themselves in a position of having too much stock and having to discount prices. He added that they can only wait so long if they expect to have goods on store shelves by the holiday shopping season.

"At some point, they have to pull the trigger," O'Connell said. "But all the economic forecasts seems to be pairing back from what they were saying a month ago. There was a hope that consumer demand would accelerate. I think there is a lot of hedging of bets right now."

ALSO:

Exports on the rise

Terminal operators to cut emissions

-- Ronald D. White

Photo: Tugboats help an OOCL container ship dock at the Port of Long Beach. Credit: Port of Long Beach

Pollution from cargo ships drops in wake of new California rules

At some point in the journey from factory to store shelves, as much as 90% of the world's shipped goods  spends time on board a ship. For places like Los Angeles and Long Beach, the good news about this supply chain reality is that the biggest seaports handle the most cargo and get the greatest number of generally well paying jobs.

The bad news is also sizeable. Cargo ships at sea burn what can only be described as the -- in the words of one research chemist -- "bottom of the barrel" grade of fuel, also known as bunker.

"Bottom of the barrel is literally what bunker fuel is. It's what the refineries have left after all of the cleaner burning fuels -- aviation, gasoline, diesel -- has been produced. It's the sludge at the bottom where all of the bad stuff concentrates, all of the sulfur and the heavy-metal compounds," said chemist Dan Lack, who works with with the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory and the Cooperative Institute for Research in Environmental Sciences.

But Lack and his associates have some data that might literally help those who live near California's major seaports breathe a little easier: When cargo ships slow down and switch to a cleaner-burning fuel as they approach shore, the reduction in pollution levels is startling.

Their study of a Maersk cargo container ship operating under California's 2009 near-shore, low-sulfur fuels regulation and the state's voluntary slowdown policy found that emissions of several health-damaging pollutants, including sulfur dioxide and particulate matter, fell dramatically. The ship was the Margrethe Maersk.

Sulfur dioxide levels fell 91%. Sulfur dioxide emissions can lead to the formation of particulate matter in the atmosphere that poses serious public health concerns. Particulate matter pollution, which can damage people’s lungs and hearts, dropped 90%.

Lack said the study was important because it involved a case in which a regulation wasn't ignored after it was enacted.

"It’s important to know that the imposed regulations have the expected impacts. The regulators want to know, the shipping companies want to know, and so do the people,” Lack said.

ALSO:

California joins suit against Inland Empire project

Terminal operators at ports agree to cut diesel emissions

-- Ronald D. White

Photo: The container ship Margrethe Maersk steams toward California in May 2010. Credit: National Oceanic and Atmospheric Administration and Cooperative Institute for Research in Environmental Sciences

 

Los Angeles, Long Beach ports best positioned for cargo growth

The latest report from global commercial real estate brokerage Jones Lang LaSalle says that the ports of Los Angeles and Long Beach remain the best positioned in the nation for taking advantage of growth in international trade.

The Jones Lang LaSalle seaport index rates the nation's 12-busiest harbors on a point system that ranges from a potential low of 37 points to a high of 100 points, based on criteria such as the amount of cargo handled, the size of the local consumer population, and the relative strengths of the surrounding warehouse and distribution system. As a practical matter, the company points out that scores seldom fall below the low 70s.

The Los Angeles and its San Pedro Harbor neighbor, Long Beach, were the only two ports with scores above 90. The Port of Los Angeles, the nation's No.1-ranked cargo container port, came in first with a score of 95.1. The Port of Long Beach, second only to Los Angeles in container cargo handling, came in second with a score of 92.8.

Their closest competitors were the Port of Houston, on the Gulf Coast, at 89.5 and the nation's third-ranked container port in terms of cargo, the Port Authority of New York and New Jersey on the East Coast, at 88.9.

"Los Angeles and Long Beach are out in front, in part because the volume of cargo they move is dramatically higher than their nearest competitors. They are investing heavily in the future in terms of capital projects and they have the nation's strongest warehouse and distribution system. They are at the top of the heap among the nation's seaports," said John Carver, executive vice president for ports, airports and global infrastructure at Jones Lang LaSalle.

Part of the reason for Los Angeles' and Long Beach's high rankings are the extensive capital improvement projects. Los Angeles will spend $1.5 billion in the next five years to improve cargo terminals at the port. Long Beach will be spending $4 billion over the next 10 years, a spokesman said, on such projects as the replacement of the aging Gerald Desmond Bridge.

Together, the ports of Los Angeles and Long Beach handle more than 40% of the nation's Asian imports and rank as the sixth-busiest harbor in the world, behind Singapore; three Chinese ports--Shanghai,  Hong Kong and Shenzhen; and fifth-ranked Busan, South Korea.

The movement of such a high percentage of the nation's cargo makes logistics one of the region's most important sources of employment, accounting for nearly 565,000 jobs in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties.

Carver added that international trade has been one of the few economic bright spots in an otherwise tepid recovery.

“While natural disasters, geo-political unrest and general uncertainty have plagued the economic recovery, global cargo volumes have increased substantially,” said Carver. “In fact, $316 billion worth of U.S. international imports and exports were recorded in May, just under the all-time high recorded in July 2008.”

Also: Port of Los Angeles headed for a record export year

Also: Terminal operators agree to cut diesel emissions

--Ronald D. White

Photo: Ships are loaded and unloaded at the Long Beach Container Terminal. Credit: Los Angeles Times

Port of Los Angeles setting a record pace for exports

The nation's busiest seaport, Los Angeles, is on pace to have a record year in exports, officials announced Friday.

Exports through the harbor in July were up 12.8% to 165,135 containers, from 146,369 a year ago. In 2010, the No. 1 ranked container port set a record for exports with more than 1.8 million containers, but is so far on pace to surpass that total.

"We are pleased with the numbers. This is a robust total for exports, especially when you consider that last year was our best for that category," said Los Angeles port spokesman Phillip Sanfield.

Even with the strong showing for exports, however, the nation's huge trade deficit was again apparent. There were more than twice as many imports moving through the port in July, even though the numbers represented a decline of 3.2% to 357,668 containers, from 369,389 a year earlier.

Empty containers represented the biggest drop at the port, down 23% to 165,523 containers, from 214,988 a year ago. Empties are usually headed back to Asia to be later refilled by more imports, but the large number of export containers meant that fewer empties needed to be shipped back.

Overall, the port moved 688,326 cargo containers in July, off 5.8% from a year ago.

Sanfield said that port officials were not worried that the numbers represented a slowdown in the economy. He pointed out that the port experienced an unusually heavy cargo season last summer as retailers rushed to replenish record low product inventories left depleted after the Great Recession. This year, the heaviest months for cargo aren't expected to begin until September.

For the year, the Port of Los Angeles is still slightly ahead of its 2010 pace through July. The port has moved just under 4.5 million containers through the first seven months of 2011, an increase of 1.4% compared with the same period last year. That's already more than all but two other U.S. ports will move during the entire year. Only second-ranked Long Beach and third-ranked New York-New Jersey will exceed that total this year.

When considered as a single harbor, Los Angeles and neighboring Long Beach rank as the world's sixth-busiest seaport complex.

--Ronald D. White

Photo courtesy of the Port of L.A.

Related: Retail sales rose in July

Related: U.S. trade deficit rises

Related: South Koreans fear economic downturn

Southern California dominance in international trade is likely to continue, report says

The Los Angeles Customs District, which includes the Los Angeles and Long Beach seaports, is expected to remain the nation's preferred gateway for international trade in 2011. It will handle about $372.8 billion in imports and exports this year, an increase of 7.5% over 2010, according to a new report by the Los Angeles Economic Development Corporation.

The report, International Trade Trends: The Southern California Region Review and 2011 Outlook, was officially released Monday at midnight. It contains a number of positive indicators about the effect of trade on the Southern California economy.

In 2010, the Los Angeles Customs District handled $346.9 billion in imports and exports, good enough to maintain its No. 1 ranking in the U.S. New York, the No. 2-ranked customs district, handled $326.3 billion in goods that year. It was followed by third-ranked Detroit, at $218.1 billion; fourth-ranked Houston, with $211.5 billion; and fifth-ranked New Orleans, at $191.2 billion, the LAEDC report said.

The LAEDC estimated that the Los Angeles and Long Beach ports, which rank first and second, respectively, in the U.S. in the number of cargo containers they move, will handle about 14.8 million containers in 2011, an increase of 5.2% over 2010.

Job growth will lag behind those numbers, however, the report said, as cautious employers restrict  hiring and demand more from existing workforces. In Los Angeles, Orange, San Bernardino, Riverside and Ventura counties, international trade will account for 516,600 jobs in 2011, up 2% from 506,500 trade jobs in 2010, the report said.

The report said that it was too early to judge the effect of a newly expanded Panama Canal, which will be able to handle larger ships that normally would have had to stop at ports on the U.S. West Coast. The expanded Panama Canal is set to open in 2014 and could divert some cargo and jobs from Los Angeles and Long Beach.

The report's principal author, LAEDC Chief Economist Nancy Sidhu, said Los Angeles and Long Beach were working hard to maintain a competitive advantage.

"A number of key infrastructure and terminal expansion projects are underway" at the two ports, Sidhu said, "so we'll have the capacity to handle more volumes in the future."

The report said there were some potential challenges on the horizon, such as the effect of high oil prices. That's in spite of oil prices having recently fallen 15% from their April peak.

"High and volatile oil prices could dampen the pace of international trade growth in 2011 and certainly will boost transportation costs of freight carriers and possibly rates paid by shippers," the report said. "Ocean carriers, for example, are paying nearly three times as much for bunker fuel as they were a year ago."

Bunker fuel is what the world's freight ships run on for most transoceanic voyages.

-- Ronald D. White

Photo: Hal Burkey, Long Beach Container Terminal maintenance and repair manager, watches a crane operator load containers onto the Orient Overseas Container Line Tianjin of Hong Kong. Credit: Allen J. Schaben / Los Angeles Times

Trade volumes at local ports grow, but job gains lag

International trade numbers at the ports of Los Angeles and Long Beach improved by more than 6% in April when compared with a year ago. It was the 15th straight month of growth at the nation's largest seaport complex, although the pace of that increase has slowed. But trade-related jobs, while showing gains throughout the state and the region, were building at an even slower pace.

The twin ports handle more than 40% of the nation's imports from Asia, making them an important barometer for the strength of the U.S. economy. The ports are also part of one of the state's most important job engines in wholesale trade, transportation and warehousing. But even though seaport trade is up almost 8% so far in 2011, trade jobs are up just 0.7% in Southern California and by just 2.8% in California.

"Employers are still being very cautious. As trade volumes have picked up, they are getting more out of the people they already have, and they are hiring temporary workers who do not show up in the full-time employment figures," said John Husing, founder and head of Redlands-based Economics and Politics Inc., which tracks international trade and provided the trade jobs numbers.

In Los Angeles, Orange, San Bernardino, Riverside and Ventura counties, the most recent trade-related employment statistics showed a growth of 4,100 jobs to 564,833, a gain of about 0.7%, compared with 2010, Husing said. Statewide, there were 1,062,800 people employed in international trade jobs, up 29,400 compared with 2010, Husing said, adding that job gains should improve as employers grow more confident about the economy.

At the ports, the mood was positive.

"These are solid, sustainable numbers for us. It's a good range for us to be in," said Art Wong, spokesman for the Port of Long Beach. His counterpart at the Port of Los Angeles, Phillip Sanfield, said, "We're pleased that we are continuing to see strong, steady growth."

Experts who track international trade through the nation's biggest seaports were expecting the trade numbers to level off in May, then remain steady until the summer, when they were expected to show another spurt as goods are shipped for the busy end-of-the-year holiday season. But those experts said that was not a sign that the economic recovery was losing steam.

“After nearly a year and a half of volume increases, it’s not surprising to see some leveling off,” said Jonathan Gold, vice president for supply chain and customs policy for the National Retail Federation, which tracks trade volumes at all major U.S. seaports.

“Retailers are being cautious with how much merchandise they import due to economic pressures such as higher commodity prices, but overall consumer demand remains strong,” Gold said.

One of those commodities Gold referred to was oil, and fuel prices are likely to be a bigger burden for the nation's importers and exporters later this year as the ocean freight lines that carry the cargo pass on hefty surcharges for the bunker fuel that runs the cargo container ships.

AXS Alphaliner, the Paris-based maritime consulting firm, said that, by June, those fuel surcharges are expected to surpass record levels set in 2008.

In April, the Port of Los Angeles handled 312,360 cargo containers carrying imports, up 3.4% compared with a year earlier. Export containers through the port climbed 5.8% to 167,448 compared with the same month in 2010. Overall, including empty containers, the port moved 617,273 cargo containers in April, up 3.7% compared with a year earlier. Through the first four months of the year, traffic at the nation's busiest port is up by 8.5% to 2.4 million containers.

At the neighboring Port of Long Beach, which ranks second only to Los Angeles in container trade, the number of import containers rose 12% to 270,107 in April. Exports through Long Beach were up 10.4% to 143,683 containers. Overall, including empty containers, the port moved 531,090 containers, up 9.5% compared with a year earlier.

Combined, the two ports were up 6.3% with 1.1 million containers moved in April compared with a year earlier. Both ports are up 7.9%, to 4.3 million containers through the first four months of 2011.

-- Ronald D. White

L.A., Long Beach ports have record-breaking year in 2010

The nation's busiest seaport complex had a record-breaking year in 2010 with new marks set in exports and the biggest year-over-year increase since container traffic record keeping began, said officials at the ports of Los Angeles and Long Beach. Experts said they expected a strong economic recovery to continue at the biggest seaports in the U.S. through January, although not at such a rapid pace.

That's great news for the Southern California economy, where trade accounts for more than half a million jobs.

At the Port of Los Angeles, which ranks first in traffic, overall container traffic -- including empties -- rose 16% in 2010 to 7.8 million containers, up from 6.7 million a year earlier. That included a record year for exports at the port of 1.8 million containers, up more than 10% from less than 1.7 million in 2009 and surpassing the previous best of less than 1.8 million in 2008. Imports rose 12.8% to nearly 4 million containers, up from 3.5 million a year earlier.

It was an even better year for the Port of Long Beach, which ranks second in container traffic only to Los Angeles. In 2010, the Long Beach port saw an increase in total traffic of 1.2 million containers to Containerized cargo at the Port of Long Beach increased by 1.2 million units in 2010, the largest single increase of any seaport in the United States, according to numbers released Tuesday.

Long Beach port shipping terminals moved a total of 6.3 million 20-foot equivalent containers last year. The jump represented a nearly 25% gain over 2009, when the port moved less than 5.1 million containers. It was the largest one-year increase in port history, and the biggest gain from 2009 among the nation's major seaports.

After the grim assessments they had to make in 2009, port and city officials were far more enthusiastic this time around.

"With this 16% increase in 2010 container volumes, the Port of Los Angeles is putting people back to work and doing its part to help President Obama meet his goal to double national exports over the next five years,” said Los Angeles Mayor Antonio Villaraigosa. “This is good news not only for Los Angeles, but cities across the nation."

Los Angeles port Executive Director Geraldine Knatz added “The 2010 volume gains far surpass our initial estimates. We want to continue that momentum."

Over in Long Beach, port Executive Director Richard D. Steinke said "This was a tremendous rebound, and happened much faster than predicted. Best of all, the additional cargo has brought back thousands of port-related jobs throughout the supply chain and we're very optimistic that the job growth in this industry will continue in 2011.”

January is expected to be another strong month for the nation's ports as a whole, with import volumes expected to rise by 8% compared with the same month in 2010, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“While the economy clearly began to recover in 2010 and drove up cargo volume as retail sales improved, maintaining that momentum in 2011 could be difficult,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said, adding “Consumers faced with continued high unemployment are expected to focus more on necessities than discretionary spending. Retailers will continue to carefully gauge consumer demand and adjust import levels accordingly.”

But double-digit increases are much less likely.

“Our projections for 2011 remain firm, albeit not at the levels of the recovery rates of last year,” Hackett Associates founder Ben Hackett said. “Growth in the upper single-digit levels can be expected, particularly on the West Coast.”

Hackett Associates tracks trade every month at each of the nation's biggest seaports for the National Retail Federation.

Readers can find more information about the Port of Los Angeles here and information about the Port of Long Beach here.

-- Ronald D. White

Shore power for cruise ships coming to San Diego

Work crews at the Port of San Diego have begun to install equipment to allow docked cruise ships to plug into electrical power from the shore.

The project will mean cruise ships won't need to run their diesel engines to power the ships while docked at the port, reducing the amount of air pollution generated along the shore.

The $7-million project should be completed by December but will allow only one cruise ship at a time to plug into the power system, according to port officials. The port serves between 150 and 200 cruise ships per year. Port officials hope to expand the system to power two ships at a time by 2017.

The project, partly funded with a $2.4-million grant from the San Diego Air Pollution Control District, is required under a state law that seeks to cut port emissions by 2014.

Similar projects have been completed at cruise ship ports in Juneau, Alaska; Seattle; and Vancouver, Canada.

-- Hugo Martin

Photo: The Carnival cruise ship Elation docks at the Port of San Diego. Credit: Port of San Diego

California trade numbers improve again

For the third straight month, California's exports showed improvement over the same period a year earlier, according to an analysis of federal trade data by the University of California Center Sacramento.

The $10.3 billion in goods shipped abroad in January represented a 18.5% increase over the $8.7 billion recorded during the same month last year. The products shipped by land, sea and air included high-end, top-value items such as civilian aircraft engines and parts. They also included low-value bulk, such as scrap metal and paper that will become the raw materials for new goods manufactured in Asia.

During January, California also imported $23 billion in goods from overseas, up 14.6% over year-earlier figures.

There was a caveat to the good news: The trade figures are still far below those recorded during the global economic boom.

"We are now just getting back to the level of exporting we were at in early 2007, before the global financial and economic crisis sent international trade spiraling down," said Jock O'Connell, the UC center's international trade and economics advisor.

California's top trade partners are, in order, Mexico, Canada, Japan, China, South Korea, Hong Kong, Germany, Taiwan, Britain and the Netherlands.

-- Ronald D. White

Photo: Containerships and cranes like Pier T at the Port of Long Beach. Credit: Don Bartletti / Los Angeles Times

California exports rose in December

An awful year for California’s foreign trade took an encouraging turn in December, with exports showing a 12% increase over the same month in 2008, according to a report released Wednesday.

California shipped $11.6 billion in goods to foreign destinations by air, sea and land, topping the $10.4 billion the state shipped abroad in December 2008, according to a University of California Center Sacramento analysis of international trade data released Wednesday morning by the U.S. Commerce Department.

Although the numbers were a welcome change, experts cautioned that they came after a full year of severe declines. Many economists use exports as a gauge of the state's economic well-being.

“As encouraging as these new numbers may appear, they only mark the start of a recovery from two years of sharp decline,” said Jock O'Connell, the UC center’s international trade and economics advisor. “We are now essentially where we were with exports at the end of 2006.”

The state’s exports of manufactured goods in December were up 5.1% from a year earlier. Shipments of agricultural goods and other nonmanufactured products rose 5.2%. Exporting of goods that originated out of state increased by 17.4%.

California accounted for nearly 12% of all U.S. merchandise exports in December of $99.2 billion. With services added to the tally, U.S. exports hit $142.7 billion for the month.

For all of 2009, California exports dropped 17% to $120.1 billion.

A detailed breakdown of what kinds of goods were involved in the turnaround wasn’t available, but O’Connell had some general numbers to share, which included at least one fact that might come as a surprise to many Californians.

The state’s top export category was civilian aircraft engines and parts. O’Connell said goods in that category accounted for $5.3 billion of the total in 2009. There was no comparable figure for 2008 because trade classifications had changed, he said.

No. 2 on the list was electronics, in the form of integrated circuits, at $2.4 billion for the year. That compared with $3.1 billion in 2008. Third were parts and accessories for automated data processing equipment, which amounted to $2.3 billion in 2009, down from $2.8 billion a year earlier.

The fourth-biggest category might be the least well known. The state exported $2.2 billion in non-industrial diamonds in 2009, down from $2.8 billion in 2008. O’Connell said the diamonds probably had been upgraded during their stay in California from their raw form.