Container congestion

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محتوى الصفحة: Home > مجلة النقل الدولي "Transport International" > Issue 19 April 2005 > Container congestion

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Port unions are demanding larger trained workforces and better operating systems to cope with surging cargo traffic

In January 2005 the World Trade Organisation completed a 10-year phase-out of its Multi Fibre Agreement, which until now has restricted exports of clothes and textiles to the US and Europe from large low-cost producers such as China and India. The lifting of quotas gives such countries unrestricted access to textile markets for the first time since 1959. They are now poised to meet the bulk of demand for Western clothing, under-cutting smaller exporters such as Sri Lanka and Bangladesh, as well as domestic Western producers.

Some existing producers will struggle to survive in the newly liberalised marketplace. At the same time, the changes to global trading patterns will have major impacts on shipping lines and port work flows. Ports in the importing countries – already under pressure from the surging volumes of cargo created by globalisation – expect to be inundated.

The WTO predicts that China will become the biggest clothes exporter to the US, taking a 45 per cent share of the market (up from 16 per cent) within three years. India is expected to take second place at 18 per cent, up from five per cent in 2002. Textiles already account for 18 per cent of Chinese exports. The country will now dramatically increase its output, creating a boost for container shipowners and a headache for under-resourced ports.

Keeping up with demand

In China itself, the transport modes are struggling to keep up with ever growing foreign demand for Chinese goods. Major investment has gone into the ports, aviation and highways while plans have been unveiled for a country-wide rail-linked container depot network. Chinese shipping giant Cosco appears to see investment in European ports as a crucial strategy for ensuring that its massive growth plans can be met.

The company’s group president Captain Weir Jaifu told shipping newspaper Lloyds’ List in December 2004 that it may spend up to E500m (US$664.3m) on developing a container terminal in Hamburg, which handles more cargo from China than any other European port. This follows a major investment in a container terminal at Antwerp, Belgium in November, where COSCO now has a 25 per cent stake as part of a joint venture with P&O Ports, P&O Nedlloyd and Duisport.

Port operators are sometimes resistant to the development of terminals dedicated to individual shipping lines, but Hamburg is not alone in recognising the urgency of developing its capacity. Even without the current impetus created by the forecast for Chinese textiles, importers are having to face up to the logistical challenges brought by the ever increasing globalisation of manufacturing and trade.

In a paper submitted to an OECD workshop on maritime transport late last year, the US department of state wrote: “…recent shifts in international trade patterns (have) triggered the growth in imports that has suddenly made a long-term concern into an immediate problem. Moreover the shift in trade patterns does not appear to be temporary; the demand curve for imports into the US appears to have shifted upward more or less permanently.

“Manufacturing operations are concentrating in Asia and China in particular. Between January and July 2004…the growth in trade in goods with Asia reached 19.5 per cent, but exploded by more than 87.4 per cent with China. Compared to the same period last year, trade in goods with China increased by 30 per cent…”
The paper goes on to point out that while shipping companies have largely been able to meet increased demand with additional services and larger vessels, the West Coast ports, which handle most of the container traffic from Asia were unprepared to meet demand due to labour shortages: “The West Coast ports are hiring 3,000 so-called “casual” workers, who will require substantial training and on-the-job experience before they are qualified to work the heavy equipment and cranes in the ports.”

Labour shortage crisis

In November 2004 the International Longshore and Warehouse Union (ILWU) which serves West Coast dockers in the US, and the ITF issued a joint statement, calling upon port terminal operators and stevedores to meet worldwide shipping demand by hiring and training more workers at major ports and by upgrading inefficient equipment.

The longstanding demands of union groups are now being repeated by several industry executives frustrated with record congestion levels. Just prior to the issuing of the ITF/ILWU joint statement, two major global shipping companies vowed to pressure terminal operators to invest in the skilled labour needed to keep the intermodal goods system working smoothly. Executives from two of the world’s biggest container lines, NYK and P&ONedlloyd, used Lloyd’s List as a platform to criticise terminal operators for making excuses about their inability to reduce cargo congestion.

According to Yukio Ozawa, NYK senior managing director: “In the US and Europe, the shortage of dock workers is becoming a serious problem for the entire maritime industry, as shipping demand is now growing at a much faster pace than expected. “For months, West Coast longshore workers had been demanding that the terminal operators hire and train enough workers to meet the growing national demand for cheap imported goods.

“We proposed hiring several thousand more workers at the Ports of Los Angeles and Long Beach in February 2004. Since hirings were made in August, we finally have enough people in training to meet current demand for labour,” said ILWU president James Spinosa. “ Short-term thinking does not help solve the congestion problem, nor does it reduce the pollution impacts of idling trucks and outmoded port equipment. For four years, the ILWU has been proposing innovative ways of moving cargo to keep the supply chain moving.”

ITF dockers’ secretary Frank Leys commented: "Terminal operators haven’t always listened to the international trade union movement’s arguments that well-trained port workers are essential to the maritime industry and to the smooth and safe handling of cargo. However other stakeholders are recognising that skilled workers contribute to the good of the industry. We hope this will lead to a broader positive shift inattitude."

The ILWU and ITF are working with dock workers to ensure that those ports that invest in their equipment, in proper training and in the development of an adequate workforce are held up as models for the industry as it faces up to the challenges ahead.

Facing up to congestion factors on the US West Coast

The recent port congestion on the US West Coast is the consequence of several infrastructure and planning problems that converged last summer to create a logjam, sending ripples through the international shipping industry. Whether this wake-up call was enough to get those in charge to deal with the underlying causes remains to be seen. more>>

الصفحة الرئيسية للأقسام:
Issue 19 April 2005

صفحات أخرى لـ Container congestion:
Congestion Factors on the US West Coast

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