Some say the true test of how well a business works is not only how it handles adversity, but how skillfully it deals with prosperity.
The Port of Tacoma has proved over the last few years how adeptly it can handle decline. Now with the sudden rush of new business brought by the move of the Grand Alliance shipping consortium to Tacoma from Seattle it is testing its mettle in handling the demands of sudden plenty.
Nearly three months after the first Grand Alliance ship arrived at the port, the port, its terminal operator and its labor force are still struggling to handle the torrent of new business efficiently and smoothly.
And that torrent is truly a deluge.
Consider new figures the port released last week. The port’s container cargo business was up 29.8 percent in August from 120,841 container units in August last year to 156,804 units this year. Intermodal lifts increased by 25 percent over a year earlier.
And the port’s break bulk business, cargoes too large or awkward to be shipped in standard containers, was 85 percent better for the year to date.
The port is estimating that on an annual basis its bread-and-butter container business will increase port volumes by some 400,000 to 425,000 container units. That would put Tacoma back in the same league it was in 2006 when container volumes peaked.
The new surge in business at times has strained port facilities and its longshore labor force resulting in delays for truckers, shipping lines and shippers moving cargo through the port.
ADJUSTING TO NEW WORKLOAD
Port of Tacoma chief executive John Wolfe acknowledges that the business volume has taxed the port’s resources, but he says all the parties involved are working diligently to get the operation doing its job better.
Some waterfront workers say the transition to the higher volumes has at times been difficult.
Cranes that load and unload ships are working at two-thirds of their target capacity, and some ships are leaving behind schedule.
Those kinds of startup issues are not atypical of new operations, said Wolfe, particularly ones that have been quickly put together.
The timetable for preparation for the move was short. New equipment had to be brought in on short notice. Workers had to be trained on new machines, and new streams of truck traffic had to be accommodated.
The Grand Alliance’s four shipping lines, Hapag-Lloyd of Germany, NYK of Japan and Orient Overseas Container Line of Hong Kong plus ZIM of Israel announced on March 9 they would be coming to the port’s Washington United Terminal in mid-summer. Those shipping lines share capacity in the trans-Pacific routes between Asia and the West Coast.
After that announcement, two other new containership routes were announced connecting Tacoma with the Mediterranean and with the South Pacific.
Less than four months after the Grand Alliance’s announcement, the first Grand Alliance ship, the 66,000-ton Dusseldorf Express, called at Washington United Terminal on July 2.
A little history is instructive at this point. In the middle of the last decade, NYK, one of the Grand Alliance shipping lines, had made a deal with the Port of Tacoma to move its operations to the Tideflats from Seattle. In preparation for that move, Tacoma planned to build a whole new terminal at the cost of more than $1 billion for NYK. The port bought up businesses, demolished buildings and began detailed planning for the move before the recession hit. The target was to have those new facilities ready for NYK by mid-2012,
As the recession took its toll on the economy, both the port – which was running behind schedule and over budget on the NYK Terminal – and NYK, which was seeing cargo volumes slide, took a second look at the terminal project and stopped it in midstream.
In 2012, NYK moved to Tacoma along with its partners with barely four months notice.
It moved into an existing shipping terminal, Washington United Terminal, that was operating well below capacity. The port had extended the WUT’s pier to handle two containerships simultaneously, but it wasn’t the kind of expansive facility that NYK would have occupied had it continued with its original plan.
CHANGING OPERATIONS AND DOUBLE SHIFTS
To handle the increased volume of business, the terminal operator, Korea’s Hyundai Merchant Marine, had to change the way it operated the terminal to maximize the use of the existing ground.
When the terminal was serving mainly Hyundai’s own ships, it operated with a single layer of containers parked on trailers on the terminal.
When the volume increased with the Grand Alliance’s arrival, WUT brought in a fleet of rubber-tired gantry cranes, big mobile cranes shaped like an inverted U that could lift and place containers in stacks four wide and five high.
Longshore workers had to be trained both how to operate and how to maintain that new kind of equipment.
Dockworkers and their supervisors, accustomed to working just one ship at a time at WUT, had to learn new work strategies at a terminal that now handled two ships simultaneously.
To make room for the Grand Alliance ships at Washington United, Hyundai moved its own ships to rival terminal APM on the Sitcum Waterway.
That terminal, too, had seen its volume drop with the move of Maersk Line to Seattle in 2009. Hyundai plans to move its own ships back to WUT when work is operating more smoothly there.
Tacoma Rail hired new workers to move the container trains out of the yards, said Tacoma Rail superintendent Dale King.
Although some of those new workers disappeared when they realized they might have to work nights, the short-line railroad has improved its performance greatly over the last two months, said King.
Truckers initially complained they were waiting for hours to enter the terminal to pick up their loads. The terminal operator and the Longshore Union increased the number of clerks stationed at the terminal gates handling the documentation for the containers.
The port spent nearly $700,000 building a lot where waiting trucks were queue up instead of clogging the port’s arteries.
An off-site container storage area was also created to store containers awaiting shipment.
Meanwhile, at the Longshore Local 23, the union rolled out double shifts for the first time in years. Moving to double shifts allowed workers seeking more work to work two shifts, doubling their earnings.
Scott Mason, Local 23 president, said the union has elevated all but 14 of its B level workers to A status. The Longshore union has three levels of workers, A, B and casuals. The A workers are first to get available work followed by the B workers and then the casuals.
A and B workers enjoy union benefits. Casuals get union wages but not full union benefits.
Until the Grand Alliance arrived, casuals might find work occasionally. Now, casuals routinely find work.
The demand for Longshore workers is so high that the union and the Pacific Maritime Association, a consortium of shipping lines, ports and terminal operators that work closely with the union to fill the labor needs of the waterfront, have sent out letters to more than 300 workers picked in a 2005 lottery to fill the ranks of the union, but never called out.
That letter asks those who are still interested seven years after the lottery, to report for screening and training.
Mason said those workers, many of whom may have found other jobs, may not be enough to fill the depleted ranks. The local plans to elevate 75 of the casual labor force to the B ranks.
Some casuals, think there should be more promoted from within their ranks.
The union and the PMA are now debating how and how many recruits to the depleted union casual ranks. Mason said the issue is being debated in San Francisco where both the union and the PMA are headquartered.
The PMA wants to use the method used in 2005 to find new casuals. In that lottery, each Longshore member could give a friend or relative a referral and they would automatically be entered in the lottery. The remaining slots in the lottery would be filled from the general public.
The union wants to use another method, but it won’t say exactly what method it favors.
Some union insiders say some members are lobbying for a system that allows them to ensure a spot for their friends and relatives only. Mason said the method and the number are still undecided.
Wolfe said he expects the wrinkles will be worked out of the system within a few more weeks.
“We’re working every week to meet our goals. I’m sure we’ll meet them.”firstname.lastname@example.org