TMF Fee Increasing, ILWU Bankruptcy, and Going Green.
Your weekly All-Ways round-up of Supply Chain news.
TMF to Increase
In an effort to mitigate congestion and air pollution on local streets and highways near the Los Angeles and Long Beach ports, PierPASS created the OffPeak program back in 2005. The program implemented night and weekend shifts to manage truck flow in the 12 container terminals near the ports. More than 57 million truck trips have benefited from the system.
More gate hours mean more operational costs. With labor being the bulk of the expense of extended gate hours in operation, the TMF will increase by 4% on November 1 to match the 4% increase in longshore wages at $35.57 per TEU or $71.14 per forty-foot container.
Net costs in 2022 to operate terminals’ off-peak shifts totaled $324 million. The costs were offset by the $295 million from the TMF.
Exempt containers include -
- Empty containers
- Import/export cargo in a container that had a fee from the Alameda Corridor Transportation Authority
- Transshipment cargo
- Empty chassis and bobtail trucks
ILWU in Trouble
Not too long after the labor contract fiasco ended, the ILUW is back in the limelight. This time, they’re filing bankruptcy.
It started as a feud over 2 electrician jobs a decade ago in Portland, Oregon. The International Container Terminal Services Inc (ICTSI) is a Philippine-based operator that leased Terminal 6 in 2010. The Port of Portland had contracted 2 workers from a rival union. This conflicted with the PMA and ILWUs agreements.
The ILWU allegedly slowed down operations intentionally over the next few years in retaliation, causing the ICTSI to lose its clients at the terminal and breach its 25-year contract at the port.
In March 2020, a judge ruled that if both sides agreed, the ILWU was to pay the ICTSI $19.06 million to cover the damages incurred. The ICTSI, however, didn’t accept it and is seeking $48 million-$142 million.
With an estimated legal cost of $8.5 million in legal fees for the new court date and only $9.5 million in cash, the ILWU filed for Chapter 11 protection. Its plan is to give about 83% of the expected cash balance on January 1 to the ICTSI and be left with $1.28 million working capital.
This case directly affects 25 ILWU employees whose job is to improve wages and working conditions of the dockworkers.
Is the ILWU just avoiding accountability?
Pacific Green Shipping Corridor
With the support of C40 Cities, the Ports of Los Angeles, Long Beach, and Shanghai amongst other industry professionals are partnering to reduce emissions on the busiest route in the Pacific with the new Green Shipping Corridor Implementation Plan Outline.
By 2025, partnering carriers like CMA CGM, COSCO Shipping Lines Co., Ltd., Maersk, and ONE will have deployed reduced or zero lifecycle carbon ships.
"This trans-Pacific green corridor will be a model for the global cooperation needed to accelerate change throughout the maritime industry. Reducing emissions in this corridor will yield substantial reductions. For perspective, most of the emissions associated with moving cargo by ship occur in the mid-ocean part of the journey between ports. This corridor will help reduce mid-ocean emissions while continuing the work we have done to cut emissions within our ports." Gene Seroka, Executive Director of the Port of Los Angeles stated.
This is an important step to greener global supply chains.