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Shippers avoiding Port of Oakland as trucker protests stop trade

by Staff Writer
July 20, 2023
in Business
Reading Time: 5 mins read
Shippers avoiding Port of Oakland as trucker protests stop trade
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The trucker protests at the Port of Oakland have stopped the flow of trade for at least two days and some vessels are now either pulling up anchor to go to another port or skipping the port. In an effort to restore production, the port has established “Free Speech Zones” which were described in an open letter to the trucking community last night.

Truckers have been protesting since Monday against the California gig labor law. That law classifies workers as employees rather than independent contractors. Truckers who are classified as independent owners and operators were protected from the law during a two-year legal stay, but after the Supreme Court decided not to hear the case, that protection was lifted.

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“Strikers say the bill’s classification requirements are unreasonable and will negatively impact around 70,000 truckers, accounting for two-thirds of port truckers in California,” explained Everstream Analytics to clients.

Truck drivers sit on a barricade as they block the entrance to a container terminal at the Port of Oakland on July 21, 2022, in Oakland, California.

Justin Sullivan | Getty Images

The International Longshore and Warehouse Union tells CNBC that 450 ILWU workers have been dispatched to the terminals in the past three days but were unable to work because of the trucker protests.

“Every day, ILWU workers are getting up at 5 am to drive to the dispatch hall and fill jobs at the port,” said Farless Dailey III, ILWU Local 10 President. “But when they get to the terminals, the trucker protests are creating conditions which make it unsafe for workers to pass through the gates and do our jobs.”

The ILWU dispatched 450 workers in the past three days who were not able to get in to move cargo. “They don’t get paid when they don’t get in,” Dailey said. “ILWU workers want to work and move cargo, just like we have every day even during the worst days of the pandemic. We are in favor of AB5, not against it. But we’re not going to put our members in harm’s way to pass through the line of truckers,” he added.

The impact of this lack of labor can be seen in both the import container wait times and vessels waiting at anchor on the CNBC Supply Chain Heat Map.

Zoom In IconArrows pointing outwards

“Currently, import containers are sitting at the Port of Oakland for more than two weeks,” said Josh Brazil, vice president of supply chain insights at Project44. “Due to a lack of intermodal capacity, dwell times exceeded 10 days even before the AB5 protest. Those containers will now spend even more time in port due to the restrictions against independent truckers,” he said.

The amount of container volume waiting to get into the port at anchor has tripled, according to MarineTraffic monitoring of the congestion. That wait has some ocean carriers now pulling up anchor and leaving.

“We are already seeing vessels skipping Oakland. Comparing vessel schedules one week ago versus today, expected arrivals until the end of August have already dropped 16%,” said Alex Charvalias, supply chain in-transit visibility lead at MarineTraffic. An example is the Maersk Altair, which skipped Oakland after waiting roughly three days off the coast, and he said is now heading to Long Beach.

The closure has also impacted loaded U.S. exports. The Port of Oakland, which is a major export port of U.S. agriculture, has had a history in recent months of being bypassed by ocean carriers due to congestion. Ocean carriers were trying to make up for the time they lost waiting for either the Port of Los Angeles or the Port of Long Beach.

According to the CNBC Supply Chain Heat Map, vessels waiting to unload at the Port of Los Angeles are waiting longer as a result of the growing container congestion. That port is at 90% land capacity with over 60% of its containers destined for rail.

Both the ports of LA and Long Beach have been battling increased rail container congestion for months. Port officials have been asking BNSF and UP for more equipment to move out the containers. The wait for a rail-bound container for the Port of LA is around seven days; the Port of Long Beach is at nine days.

East Coast vessel congestion

The diversion of trade away from the West Coast ports to the East Coast continues and as a result, an increase in the number of vessels at anchor.

“You have 36 container vessels waiting outside of Savannah carrying a total combined volume of 311,300 TEUs (twenty-foot equivalent unit),” Charvalias said. “That’s over half a month’s volume of what Savanah handles.”

Rerouting ships to the neighboring Port of Charleston may not solve the problem because the congestion will build up there as well.

“It just creates a ping-pong congestion effect that further disrupts the already strained landside operations. It may take months to clear the backlog,” he said.

China’s Covid Cases and Trucking

CNBC Supply Chain Heat Map for China shows the mass testing in North China, reported by CNBC earlier this week, is impacting the movement of trucks to the ports of Qingdao and Tianjin.

Zoom In IconArrows pointing outwards

EverStream Analytics noted Tianjin’s top exports include smartphones, and semiconductor chips and components.

Europe’s extreme heat adds to port pressures

The extreme heat in Europe is impacting water levels in key waterways of trade slowing down the movement of critical commodities.

“Inland waterways are being impacted the most,” said Andreas Braun, ocean product director for Europe, Middle East, and Africa for Crane Worldwide Logistics. “This impacts bulk shipping more, but we have also seen some container barge operators, especially on the Rhine, have to cut down on their max capacity of payloads.”

Braun said that grains like wheat, fertilizer, coal, and animal food products move by bulk vessels.

Grain prices have already been impacted as a result of Russia’s war on Ukraine. This congestion will only add additional pressure.

The heat wave is compounding the issues that logistics managers are trying to navigate. The latest European Supply Chain Heat Map shows the challenges in a sea of red.

Zoom In IconArrows pointing outwards

The congestion at the German ports which has been impacted by labor strikes is showing no signs of relief. The wait time for vessels is increasing and containers are piling up as rails are congested. This is also creating a snarl in the attempt to retrieve empty containers in the hinterland. The slowdown has backed up loaded exports bound for the United States by two and a half months. Some of Germany’s main exports are autos and auto parts.

“The situation for vessels waiting to arrive and discharge is getting more stressed,” Braun said. “The lack of empty equipment availability in the hinterland will put further pressure on empty containers going back to Asia due to be filled up with exports. The congestion is slowing vessels going back to China.”

The decreased amount of empty containers is something logistics managers are closely watching. A smaller pool of containers could fuel prices if there is more demand than supply.

The CNBC Supply Chain Heat Map incorporates data from various renowned companies in the transport logistics sector, such as Freightos, OL USA, FreightWaves, Blume Global, Orient Star Group, and more. These data providers offer valuable insights into global freight booking, supply chain intelligence, and maritime transport, making it a comprehensive resource for industry analysis.

Source by www.cnbc.com

Tags: analyticscaliforniacapacitycargocnbccoastcongestioncontainersexportsfreightlogisticsmarinetrafficoaklandoceanportportstradevessels

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