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Port Update Jan 2015

As know, West Coast dockside labor and management negotiations and significant infrastructure issues have resulted in the worst West Coast port crisis in decades.

Negotiations between the Pacific Maritime Association (PMA) -- which represents employers at 29 ports -- and the International Longshore and Warehouse Union (ILWU), which represents 20,000 dockworkers – have significantly impacted merchandise supply chain.  As a result, for the past two months, all of us in the industry have had extreme challenges getting containers off the vessel, into the warehouse and out to end users on time  (and without OT labor).

To give you an Executive Summary of what is going on – and to help plan for the next few months.

The Port of Long Beach opened a 30-acre depot for the temporary storage of empty containers.  The facility on Pier S will run to at least March 31 2015.  The idea is to provide more space to place empty cargo containers, remove their chassis and use them to pick up new loads of incoming cargo containers.

The four companies that control 95% of the chassis at Los Angeles-Long Beach (over 100,000 chassis)  agreed to develop a neutral chassis pool.  Phased roll-out began on February 1, 2015.  The assets of the four chassis pools will be interoperable, which means that a trucker pulling a container and chassis can pick up or deliver the equipment at any of the 13 terminals in the harbor without regard to which pool serves a particular shipping line or terminal.

The negotiations appear to be easing into a final agreement.  Spokesmen for both factions (PMA and ILWU) disclosed that the issue of maintaining cargo chassis has been addressed, thereby easing the way toward a final agreement.

When an agreement is reached, however, there will be an additional 30-day period to allow time for the ILWU to ratify.

The bottom line:

Overall, we feel that the situation is getting better and we should see a quicker – 5 to 7 day -- turn of containers at West Coast ports in the coming months.

We will continue to keep you updated on this evolving issue and its potential impact to your programs.