West Coast ports still feel fallout from shutdown
Shipping schedules haven't returned to normal
It's been almost three months since the end of an 11-day lockout that shut down 29 West Coast ports, including Portland. But business still isn't back to normal.
'It's been heck,' said Tony Galati, Portland branch manager for Hyundai America Shipping Agency, with uncharacteristic politeness for a shipper.
The lockout, he said, 'knocked the vessel schedule for a loop,' not just for Hyundai but for a number of carriers. 'We haven't seen the volumes through here that we would normally see.'
Hyundai ships make a regular circuit from Asia to Puget Sound, Vancouver, B.C., and Portland, then back to Asia.
But since the lockout, instead of a weekly schedule, 'We're pretty much doing every other week,' Galati said.
The target date for returning to pre-lockout operations is February, he said.
About 10,500 members of the International Longshore and Warehouse Union were barred from West Coast docks Sept. 27 by the Pacific Maritime Association, which represents terminal operators and shippers.
The docks reopened Oct. 8 under a federal court order. When contract talks resumed between the union and the maritime association after an impasse, the two sides reached tentative agreement on a new six-year contract.
Members of ILWU Local 8 in Portland, along with other union members, recently voted on the new contract, which includes a pay raise, a pension increase and fully-paid health insurance. The pact also calls for introduction of new technology on the docks.
Ballots will be counted Wednesday at ILWU headquarters in San Francisco. A simple majority is needed to approve the contract.
While the ballots are being counted, shippers still are seeking to return to pre-lockout operation.
'It's really a function of trying to get back on schedule on a global basis,' said Bob Hrdlicka, manager of the Port of Portland's marine division. 'Ever since the West Coast lockout, schedules are a little bit goofy.'
It's not easy to get back on schedule, says Galati, whose company is part of Hyundai Merchant Marine, based in Seoul, Korea.
'When you've got cargo going to a large mix of ports,' he says, 'it's very difficult to return to normal scheduling and, of course, vessel schedule integrity is something we're very focused on.'
The disruption in schedules is causing particular problems for manufacturers that have built operations around just-in-time delivery systems.
'For the last couple of years, everyone has come to rely on a fixed day of the week service, week in, week out,' Hrdlicka said. 'When that suddenly disappears, it's a real challenge (for manufacturers) trying to plan production.
'Nobody anywhere in the world anymore has the luxury of having enough in their warehouse to keep running for several months. Just-in-time (inventory) is tough to do when the schedules fall apart.'
Hrdlicka cited Spokane-based Potlatch Corp. as an example of a company that has been significantly affected by the scheduling disruptions.
Potlatch makes paper stock for milk cartons and similar end products in its Lewiston, Idaho, paper mill, then sends the stock, in shipping containers, down the Snake and Columbia rivers to Portland, where it is shipped to customers in the Far East.
Potlatch, an integrated forest products company that has exported paperboard to Japan and Australia for more than 30 years, more recently has been making a concerted effort to expand its market share in China, Taiwan and other Pacific Rim countries.
'In order to meet their customers' requirements,' Hrdlicka said, 'they need to have a certainty as far as vessel schedules are concerned.'
Potlatch's sales already were suffering. Its revenues were down 1 percent in the first nine months of last year from the previous year, in part because of declining pulp and paper sales. (Fourth-quarter results aren't scheduled to be released until Jan. 27.)
Schedules also have caused problems in Asia, source of a vast amount of goods bound for the United States. Some factories had to shut down when they ran out of storage space.
Dry-docking for cargo ships, which are on a fixed maintenance schedule, also can interfere with a return to normal schedules.