Category Archives: Ports

Container Weighing breeds profit snatchers

Posted on August 12, 2016 by | Comments Off on Container Weighing breeds profit snatchers

Talk about unintended consequences.

The Verified Gross Mass (VGM) rule promulgated by the International Maritime Organization (IMO) on July 1, 2016 is intended to make cargo and ships safer, by making sure that container weights are properly recorded. when you are loading a ship, it’s good to know how the weight is distributed. if people give you containers overfilled, you won’t have the right balance on your ship.  A ship might turn over, or other containers might be damaged if there’s a shift in cargo.

But the rule has created an entire industry and a plethora of fees being charged by supply chain partners. they’re presumably to offset ‘costs’ of the rule.  But there is a concern that they are merely ways of increasing profits.  And the fees certainly add to the complexity and cost of a container shipment, and even of identifying the best route for my cargo.

This story about India’s experience highlights some of the bad experiences shippers are having.  And it is affecting which ports are used and which carriers.  Will there ever be rationality in this area? Everyone agrees we want correct weights of containers, unless we want to cheat, but how complex can it be?

shippinglogo51The downside of IMO’s container weighing rule

Source: Shipping Tribune

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Posted in Logistics, Ports, Shipping, Supply Chains

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ILWU caucus to think about future of West Coast Port labor peace

Posted on August 10, 2016 by | Comments Off on ILWU caucus to think about future of West Coast Port labor peace

Bill Mongelluzzo writes about an attempt to get the labor situation at West Coast Ports under control. The two sides are meeting at the urging of a cargo owner and shipper group that was drastically affected by the last strike.

Ocean carriers last time were quite critical of the Pacific Maritime Association, the negotiator for the terminals, and how they handled the negotiations, blaming them for the length of the disabling strike.  The strike alone probably accounted for half the diversion of traffic toward East Coast ports. The Port of Los Angeles has just barely recovered.

The union, the ILWU, was just doing what they are supposed to; pick a crucial business period, and strike if the PMA did not negotiate in what they view as good faith.  That’s what labor unions do; it’s how they make progress for their members, the port workers. What other strategy can they have?  By ironing out difficulties in advance, the hope is that when the strike period comes around again the agreement can be adjusted to everyone’s satisfaction easily without a work stoppage.

East Coast Ports are doing the same kind of pre-negotiation. Everyone is afraid of a shutdown like the last one in prime shipping season.

HomeSource: ILWU caucus to determine future of West Coast labor peace | JOC.com

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Posted in Labor Economics, Logistics, Ports, Supply Chains

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Terminals in Ports of L.A., Long Beach move container chassis fee to September 1

Posted on August 10, 2016 by | Comments Off on Terminals in Ports of L.A., Long Beach move container chassis fee to September 1

Again the container chassis issue creates controversy.  Leasing companies created a ‘pool of pools’ in the LA/Long Beach area but are not paying port operators for services and storage performed on or by the port operators.  The $5 fee on a loaded chassis (whether the container is empty or not) is supposed to cover this work.

It’s another example of how hard it is to get a pool to work well.  Normal ways of compensating participants are not usually fair to all parties; nor do they usually act to keep the pool together.  But here the issue is simply that the pool is skimming profits by benefiting from free work by a non-participant; or we could look at the terminals as a dummy participant that contributes no chassis but pays anyway.

We have a talk on a related aspect at the IAME 2016 annual conference in Hamburg later this month.

LONG BEACH, Calif.–The West Coast MTO Agreement (WCMTOA) has extended the implementation date of a new tariff rule for chassis services by one month.

Source: Terminals in Ports of L.A., Long Beach move chassis rule to September 1 – Canadian Shipper

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Posted in Logistics, Ports, Production Operations, Supply Chains, Trucking

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