Ports of Long Beach, LA Vote to Ask Federal Maritime Commission for Antitrust Exemption to Allow for Collaboration on Congestion Relief

POLB PierA

The Long Beach Board of Harbor Commissioners voted on Monday, December 22 to join the Port of Los Angeles in asking the Federal Maritime Commission for an antitrust exemption in order to let both ports work together to solve the congestion crisis, a severely costly issue that has kept ships idling offshore as they wait for docks to clear and chassis to become available.

The Los Angeles Board of Harbor Commissioners approved the the same action earlier this month, filing a request with the federal government for this permission for the ports to work together. According to officials, the San Pedro Bay ports want to collaborate and discuss matters including rail operations, chassis supply and storage, vessel calls, truck turn times and marine terminal operations. According to a news release from the Port of Long Beach (POLB), The Federal Maritime Commission could grant the ports immunity from antitrust laws that would otherwise prohibit the two ports from collaborating.

Jon Slangerup, chief executive of the Port of Long Beach, told the commission, “The FMC-POLA discussion agreement allows both ports to work together on a common solution across the San Pedro Bay complex. We have to work together as two parts, we can’t do this alone. Everyone from the supply chain will be brought in to debate this, discuss this, to solve this.”

empty-container-port

The Pier S Temporary Empty Container Depot location. Graphic courtesy of Port of Long Beach.

Other possible solutions being implemented will include the Pier S Temporary Empty Container Depot to be opened on December 29, in an effort to relieve the truck drivers who can’t unload their cargo at the docks yet. This will allow them to unload empty containers to free up their bare chassis to pick up other cargo. The 30-acre storage facility will be open until the end of March 2015, according to the POLB.

A peak relief chassis fleet, to be acquired by the Port of Long Beach and used for peak relief hours only—when congestion is at its worst—will be implemented as soon as possible in the new year, according to Slangerup. Ports around the nation have been suffering from congestion because of increasing trade, surges from a new generation of larger ships and a shortage of chassis.

Another potential solution will include capping dockage fees to four days for the ships who have to stay docked for an extended period of time, due to port operators taking longer to load and unload their cargo. With the dockage relief, the Port would forgo an estimated $150,000 in fees by allowing longer stays without charge during December 1 and March 31, 2015. “This will relieve our partners on this dockage requirement,” Slangerup said.

Slangerup explained to the commission on Monday, “The conditions under which we operate as a port and frankly, Los Angeles and several others, are forever changed… Right now we have total chaos in terms of management of those containers at the port level and that’s the beginning of the problem.”

Slangerup said that the Port of Long Beach needs to create a system that will allow for a transparent view of a container moving through the supply chain, from the large ships to the ocean carriers required to fill them up with cargo.

He said that the Port needs to “try to replicate as much of the chain of custodial control of that entire flow of the container through the system, similar to what happens from the distribution warehouse to the end user, which is highly controlled through a custodial system.”

Slangerup also said that the Port of Long Beach is no longer a landlord port, meaning that, theoretically, the Port will no longer rent or lease their wharves or equipment to terminal operators or outside companies, who negotiate contracts with ocean carriers to handle the unloading and loading of ship cargoes.

“We are operationally tuned, we are operationally active. We must be a facilitator of change,” he continued. “We have no option. We cannot allow this year’s performance to be replicated or repeated next year. If we do next year, we’ll be dead in the water, literally. Pardon the pun.”

Rich Dines, VP for the Board of Harbor Commissioners said, “I really believe the Port of Long Beach is going to lead the world in reinventing how we move cargo in and out of the San Pedro Bay ports.”

 



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