1/12/2012

Dear valued customer

Please find further information concerning strikes at LA port

Please also refer to the attached if needed.
We will keep you updated where updates are received.

Media release as follows

29 NOV 12 PM Update

Attached are two articles that we assume most of you have seen by now – the reason we are including these articles is that the information provides answers to many of the questions that have been asked of us since the start of this mess (i.e.; why can’t Ocean Carriers divert to open terminals, what was the most recent ruling by the Coast Arbitrator, etc.).

In addition to the attached articles, we have heard that several Industry Groups/Associations have already begun contacting their local government representatives, as well as, the White House directly in hopes of bringing to light the seriousness of this situation (see separate attached Waterfront Coalition request/announcement) – if you have not done so already, we recommend your company do the same as pressure on Washington will be critical to getting timely intervention (note: most of us who lived through this 10-years ago are in agreement that the White House acted too late during the last strike/lock-out).

We think it is important to advise that we have been contacted by a handful of Ocean Carriers inquiring into the logistics and costs of picking up chassis assets in the LA-LB area and picking up loaded containers at the Port of Oakland and/or the Port of Ensenada, MX – in my opinion, this is a sign/indication that the Ocean Carriers intend to hold the line and they do not feel the OCU will change its position either!

Now some potentially good news – we have heard rumors from a couple of sources that the OCU are getting major heat from the ILWU local unions who want this dispute resolved asap – obviously, no one will confirm or deny but, we wanted you to know there are some ‘positive’ rumors in addition to the ‘negative’ signs/indicators that we are hearing/seeing.

Now the hard part – it is not my intention to shock/scare anyone, but it will take the drayage community 2-4 days to recover for every full day the ocean terminals are shut down – this will result in delayed container deliveries once the ocean terminals are back up and running. Additionally, use of all available ocean terminal gates will be critical – obviously, the use of peak gates will result in Pier pass fees/charges . We apologize in advance for this inconvenience, but the circumstances are beyond our control.

Further, please note that chassis availability is of great concern ? as most of you know, the Ocean Carrier community has greatly reduced its exposure to chassis’ in most locations across the country. The LA-LB market is no different and it already struggles with chassis availability during peak volume periods ? we find it hard to believe that the Ocean Carrier/Marine Terminal Operators are going to have enough chassis asset available to insure efficient terminal operations during all work shifts once this work disruption is over ? this will further delays in getting containers delivered as scheduled and on a timely basis.

The drayage community is not alone ? the railroads will most likely need to implement an allocation system to manage the backlog and keep railcar asset balanced (as well as chassis’ at off-dock rail yards). An allocation system has the potential to further strain the drayage community because it will create a 2-touch situation ? 1-touch picking up at the ocean terminal and move to an off-dock CY until the Ocean Carrier is permitted enough allocation and a 2nd-touch to actually deliver the container into the rail when allocation is granted.

 

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