Long Beach, California terminal affected by labor unrest and will not open Monday

  • TTI, Long Beach’s largest terminal, canceled all import and export truck orders Monday.
  • So-called “daily” longshoremen who fill day jobs do not report to work at the ports of Los Angeles and Long Beach; stable stevedores (senior employees who are part of the staff) who reported to work on Friday and Saturday
  • No union workers showed up at the Port of Oakland on Friday and Saturday
  • Reports that union workers are “red tagging” equipment to take it out of service, creating congestion and slowing down work

The largest terminal operator at the port of Long Beach and Seattle told truckers Sunday it will close for day and night shifts Monday, according to an email obtained by CNBC. The ports and workers are locked in an off-the-record dispute over wages, as well as security, automation and pension benefits.

TTI email to trucking customers about terminal closures on Monday amid labor unrest

The notice was sent by Total Terminals International (TTI), Long Beach’s largest terminal and a unit of MSC.

“Cargo from the Port of Long Beach has been moving through the terminals and we hope the parties’ commitment will continue and we encourage the parties to put [a] full faith effort for a final resolution,” said Mario Cordero, CEO of the Port of Long Beach.

But Matt Schrap, executive director of the Harbor Trucking Association, said getting such an alert on a Sunday is rare and, despite advance warning, it will make congestion worse.

The Harbor Trucking Association, a coalition representing intermodal carriers that move containers at West Coast ports, told CNBC that policies at each terminal at each port vary, so if a terminal allows trucks to enter and pick up the containers that were stranded on Friday, other terminals won’t necessarily follow. The stevedores prepare the containers for each day’s collection.

“Simply put, gate outages make it difficult for our members to plan and deploy truck capacity,” Schrap said. “Unfortunately, we don’t know which terminals will limit or close operations until that happens, and by then it’s often too late to react as the trucks are already cleared for the day.”

West Coast ports have seen this weekend both longshoremen not showing up for work, and “daily” members who fill in the hours to round out the workforce.

“The ripple effect of these moderate stoppages will push us further and further back into container pickup, where we’ll need two or three more truckers to clear” the congestion, said Paul Brashier, vice president of drayage and intermodal at ITS Logistics. “This is going to be really bad for our customers, which are the carriers and truckers, because the extra labor costs will be added to their bill, as well as any additional detention penalties. Those extra costs will then be passed on to the consumer.”

No longshoremen have reported for work at the Port of Oakland since Thursday.

“We continue to monitor the situation closely and hope this is resolved soon so trade can continue to flow,” said Robert Bernardo, director of communications for the Port of Oakland. “Especially now that we are seeing cargo volumes improve” and more ships are back in service, he added.

In the ports of Los Angeles and Long Beach, no newspapers were reported for work on Sunday. Since the volume of containers moved during the weekend is lower compared to the week, some truckers were able to pick up containers, not drop them off.

Allegations have increased that members of the International Longshore and Warehouse Union have “red-tagged” equipment for security checks, removing it from service. The ILWU declined to comment with CNBC.

“A problem at a terminal will ruin an entire day and ripple far beyond that one shift,” added Harbor Trucking’s Schrap. “If an entire complex is shut down, the wrench thrown into the gears not only disrupts activity for that particular day, but residual impacts take days to wash out as new appointments have to be made, schedules have to be changed, schedules and clients, reception hours must be adjusted”.

Trucking companies operate more efficiently when their drivers perform a “dual transaction” that involves dropping off and picking up a container on the same day.

The Port of Los Angeles, the largest port in the country, processed 2.5 million containers from January to April.