Interview: Port of Oakland Braves the Storm, Eyes More Cargo

The United States West Coast ports have braved a particularly turbulent period with the congestion woes arising from waterfront contract talks between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). The prolonged talks affected considerably the port’s business performance, driving much of their clients to East Coast ports.

Now that the new contract has been ratified by both parties, we wanted to find out more about how the West Coast ports are dealing with the aftermath.

World Maritime News spoke with the Port of Oakland’s Executive Director J. Christopher Lytle to learn about the ongoing developments at the port once the dust has settled.

Mr. Lytle also spoke about the port’s readiness for the ever bigger ships that have exerted a lot of pressure on ports worldwide, especially with respect to infrastructural capacity.

WMN: Back in March you announced that the port will need two months to clear the backlog created by the labour dispute. Have you managed to do so?

Lytle: “Yes. We had no more vessel backlog as of April 2nd. Ships started coming straight into berth at that time and most of the vessels would be in and out of the Port in a couple of days.”

WMN: Has the labor dispute between the PMA and the ILWU had any lasting effects on your operations, apart from the backlog it created?

Lytle: “Shippers are questioning the efficiency and reliability of West Coast ports – including Oakland – in the wake of the recent dispute. It’s our job to improve efficiency, ensure reliability and regain shipper trust.”

WMN: Unionised dockworkers have staged several work stoppages at the port in the first quarter of the year, even after a tentative agreement between PMA and ILWU was signed on February 20. Is there a realistic chance of the stoppages happening again in the near future?

Lytle: “It’s much less likely since the new contract is now formally in place. Overall marine terminal productivity has improved in Oakland since the cargo slowdown ended. There was a little confusion one Sunday evening over some of the contract language affecting dispatch of marine clerks that was quickly resolved with arbitration. Otherwise the Port has been moving cargo more efficiently and ships are coming straight to berth.”

WMN: In the last two months, the port saw a rise in containerised cargo volumes. Do you expect the increase to continue in the following months? How will the drop in volumes throughout January and February affect your overall stats?

Lytle: “Volumes have been recovering in the past two months. Volume growth for the remainder of the year will depend on two key variables: 1) U.S. consumer demand which drives imports; and 2) the strength of the U.S. dollar which heavily influences U.S. exports.”

WMN: There has been a growing popularity of East Coast ports among carriers who shifted their cargo from the congested West Coast ports. Do you believe this trend could resume, and, if so, what would this mean for your port operations?

Lytle: “We understand that during the cargo slowdown ports up and down the US West Coast may have lost some customers to East or Gulf Coast ports. However, we see that containerized cargo is rebounding at Oakland. Some ships that were bypassing us during the vessel backlog are returning to their regular schedules calling Oakland.

We’ve still got a lot of work to do to regain our customers’ trust. We can’t go back to business as usual. That’s why we’re looking to do things differently by implementing new ways to accelerate cargo flow at our seaport and developing a logistics hub at the waterfront. This logistics center will provide our port with a major competitive advantage: import and export distribution in millions of square feet, and enhanced near-dock rail adjacent to the marine terminals.”

WMN: We have seen a growing trend of establishing of mega alliances between container shipping companies which have set their sights on ever larger boxships. Is Oakland ready for these giants of the seas?

Lytle: “We’re fully engaged with the mega-ships that are changing the face of global trade in the Pacific. Just recently 16 big ships called Oakland in a one-month period. The Port of Oakland has been handling the largest container ships to call North America.

We’ve been preparing for these 10,000+ TEU vessels for nearly ten years. Two Oakland arrivals, the MSC Regulus and the CMA CGM Margrit, hold up to 13,000 containers each.

Oakland has deep water (50-feet of harbor depth), super post-Panamax cranes, two Class I Railroads adjacent to the marine terminals and the capacity for more throughput. In 2013 the MSC Beatrice became the largest vessel in Oakland. It holds 14,000 TEUs.”

WMN: What are the key challenges in handling these ships? What is the port doing to meet these challenges?

Lytle: “This big ship migration will test marine terminals’ ability to load and unload vessels. Oakland has capacity and convenient road and rail access for moving significantly greater numbers of containers. We have to ensure that there are enough people to work the ships and that the terminals can remain fluid and efficient when so much cargo needs to be moved.

We have a four-step plan in Oakland to accelerate cargo moves:

• Saturday operations to reduce weekday crowding inside terminals
• Off-terminal locations where cargo could be dropped off or picked up after hours
• A common chassis pool that permits harbor truckers to use any chassis at any terminal to haul cargo over the road, and
• Electronic monitoring to measure wait-times at terminal gates

We’re working closely with the terminal operators, truckers and other maritime stakeholders to facilitate steps to improve cargo efficiency here prior to peak season.”

WMN: Are there any plans to invest in infrastructure to boost Oakland’s handling capacity of these mega ships? If so, when can we expect this to take place?

Lytle: “The Port of Oakland expanded its maritime facilities a number of years ago to provide the infrastructure and capacity needed for handling big ships. We added capacity, big container cranes with booms wide enough to reach out across the width of these larger vessels, lengthened our turning basin to accommodate the mega-ships, and deepened the harbors and berths to minus 50 feet.

Now we’re embarking on developing a premier logistics hub directly adjacent to the Oakland seaport on land that used to be an army base. The Port of Oakland is currently constructing a railyard to be followed by new transload warehouses. When completed, commodities shipped in bulk can be transferred to containers for export out of Oakland and imports can be transloaded into 53-foot domestic containers and then placed on rail cars for inland shipment. We think that this project, once completed, will help us handle big ship cargo more efficiently and attract first port-of-calls.”

WMN: As the Panama Canal expansion nears its completion, what do you expect this will bring in terms of both cargo volumes at your port and West Coast ports in general?

Lytle: “The Panama Canal is already an important gateway for shippers connecting with the U.S. East Coast and those seeking an alternative to the West Coast. Expansion will allow bigger vessels to transit but it’s not clear that it will significantly shift cargo flows. West Coast ports such as Oakland, which already handle the largest vessels calling in the U.S., remain the most cost-effective and timely gateway to the U.S.”

WMN: What are the key strategic objectives for the port this year? What are your business operation expectations based on the market trends?

Lytle: “The port is working hard to improve efficiency and the movement of cargo through its marine terminals. Simultaneously we’re in talks with potential business partners on exciting new developments to establish Oakland as the pre-eminent U.S. trade and logistics hub.

These include new rail, warehousing, cold-storage and trans-loading facilities that could significantly alter global supply chains. The new projects will make it possible for shippers to move cargo to Oakland, then trans-load right at the Port to the most cost-effective means of transportation. This is capability we think no one else will be able to match. We envision significant additional cargo moving through Oakland, as a result.”

World Maritime News Staff; Images: Port of Oakland