As of July 1st, 2017, long-shore wage and assessment rates have a combined increase of 2.3% at the Ports of LA/LB. To match these adjustments, the West Coast MTO Agreement announced that the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach will also increase by 2.3%, taking effect on August 1st, 2017.
Beginning August 1st, the TMF will be $72.09 per TEU or $144.18 per forty-foot container. This charge will only be on containers that are moved on weekdays, between 3:00am and 6:00pm. For containers moved during OffPeak shifts (6:00pm to 3:00am on weekdays or 8:00am to 5:00pm on Saturdays), there will not be a TMF.
The use of OffPeak is intended to allow regular night and Saturday work shifts to handle the moving of containers via trucking at the 13 container terminals in the two adjacent ports. The OffPeak program was launched by PierPass in 2005, with the intent to reduce cargo-related congestion and air pollution on roads around the ports of Los Angeles and Long Beach. PierPass is a not-for-profit company created by marine terminal operators at the Port of Los Angeles and Port of Long Beach to address multi-terminal issues. PeirPass implemented TMF to help offset the cost of operating extended gate hours, leading to a reduction in labor costs. This fee is used as an incentive for cargo owners to use the OffPeak shifts to avoid TMF, as a result nearly half of all port truck trips presently take place during the OffPeak shifts.
According to an analysis by maritime industry consultants SC Analytics, in 2016 it cost the terminals $224.7 million to operate the OffPeak program. As a result of TMF, the terminals received $182.7 million that year, offsetting about 81% of the program’s costs.
Issues have been brought up in regards to the OffPeak program. The incurred issues include unjustified rate increases, gate operation inconsistencies, and PiersPass’s lack of correlation between the gate charge during the day versus during night operations.
Following the events involving the Spain stevedores union last week, 46 port companies decided to leave the ANESCO employers’ association. The companies signed a private agreement with the stevedores union, leading to the resignation of ANESCO’s president, Mr. Joaquim Coello, on Wednesday.
Yesterday, representatives of the “new” ANESCO met with representatives of the stevedores union and finally accepted their conditions. After the meeting, representatives of the union called off the remaining scheduled strike days.
Last week, the main Spanish ports/terminals were said to be operating normally. The congestion that resulted from the strike has been clearing up for both dry and refrigerated cargo. With this, Spanish ports are now accepting reefer containers again.
With the new agreements, the stevedores are expected to stop striking for at least the next three months. Negotiations for the 5th framework agreement for the Spanish stevedore sector will begin next week, but is not expected to be finalized until the end of September.
We will continue to keep you up to date on this matter. If you have any questions, feel free to contact us!Image Source
Last week, the main container terminal groups (such as APM Terminals, BEST-Hutchison, MSC, TTIA and Noatum), in disagreement with ANESCO, signed separate agreements with the stevedores. The agreements will commit them to negotiate the 5th framework agreement for the Spanish stevedore sector. The contract will also guarantee 100% employment against a 10% reduction of stevedore’s salaries. Negotiations for the signature of the 5th framework agreement will be finalized by September 30th.
Until the negotiations are finalized, the main Spanish ports should have a social peace. The ports of Barcelona, Valencia, and Algeciras have already begun to operate normally. These ports are not expected to be affected by the remaining stoppages that are scheduled to occur. However, congestion is still an issue, therefore all operations are not expected to be back to normal immediately. This will especially affect the reefer containers, which are still not allowed to enter the terminals. If you have cargo that requires extra protection like a refrigerated or insulated container, please consider making alternative arrangements.
ANESCO’s position with the stevedores still remains the same. However, without the support of the main container terminal groups, ANESCO’s strength in negotiations has weakened. As a result, ANESCO will become a minor player within the final negotiations, if they do not dissolve before.
After several hours of assembly, Anesco representatives informed the employers that they are rejecting the proposal presented by the stevedores’ unions last Tuesday. Anesco’s representatives state that the main reason why they cannot accept it is because they found at least three points where the stevedores’ proposal could go against the competence laws. With this notice and the past announcement of the union’s decision to hold additional strikes, it seems conflict between the stevedores and their employers will remain.
Scheduled strikes will continue as announced. The next set of 48-hour stoppages will begin at 8AM on June 26th and will continue until 8AM on June 28th. Strikes will continue to commence and end at 8AM for June 29th – July 1st, July 3rd – 5th, and July 6th – 8th.
If you have cargo that requires extra protection like a refrigerated or insulated container, please consider making alternative arrangements. These stoppages are expected to cause sailing delays, container rollover, added charges by the terminals, and carrier cancellation of vessel calls in order to avoid disrupting their schedules.
We will continue to keep you up to date on any developments of the situation. If you have any questions as to how the strike may impact the transportation of your cargo passing through the Spanish ports, please contact us!
We hope to see you there in just two weeks!