Port of Los Angeles to resume full operations following fire [Updated]

JOC Staff | Sep 23, 2014 12:13PM EDT

[Editor’s note: Updated on 9/23/2014 at 8:50 p.m. Eastern time to include a new tweet from Los Angeles regarding the fire, and new information about terminals shut down at Long Beach.]

Terminals at the Port of Los Angeles reopened as of 9 p.m. on Tuesday after being closed for several hours because of a fire at a breakbulk terminal.

The port had been closed along with its container terminals, as well as the Alameda Corridor rail route, as a result of air quality concerns resulting from toxic fumes billowing from a lumber fire at the Pasha breakbulk terminal at the Port of Los Angeles. Three container terminals at Long Beach ― TTI at Pier T, serving Hanjin Shipping; SSA Terminals at Pier A; and Long Beach Container Terminal at Pier F ― were also shut down for the day shift and had hoped to reopen on Tuesday at 6 p.m. for the night shift, though that was not confirmed.

In a tweet sent at roughly 8 p.m. Eastern time, the Port of Los Angeles said: "Port terminals plan to resume full operation at 6:00 p.m. Pasha will remain closed. Yusen reopens at 8 a.m. tomorrow."

The largest container port in the Americas had said earlier that it closed its terminals at 8:30 a.m. Pacific time on Tuesday morning, citing “precautionary reasons due to air quality.” A welding torch apparently ignited World War II-era pylons soaked in creosote at the Pasha breakbulk terminal, according to reports from the Associated Press and Los Angeles Times. No injuries have been reported from the fire that began around 6:40 a.m.

At 4:29 p.m. Eastern time on Tuesday, the Port of Los Angeles said in a tweet that the fire was 90 percent contained.

“We expect to be operating most of the terminals, if not all of them, by tomorrow morning,” port spokesman Phillip Sanfield told ABC 7 News earlier in the day.

The Alameda Corridor Transportation Authority told that rail traffic has been open and moving all day, but access to those marine terminals that were closed had been denied, impacting rail traffic along the corridor.

Two cargo vessels were evacuated from the port not because they were in danger but for precautionary reasons, Los Angeles Fire Department Capt. Jamie Moore told ABC News.

“We moved those two cargo ships out to anchorage just so our firefighters could get in there and those cargo ships wouldn't be impacting their operation,” Moore said.

A Long Beach spokesperson told that officials at the three closed container terminals would reassess the situation Tuesday afternoon to decide whether to open for the night shift, depending on if the fire and smoke from Los Angeles has stopped.

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European countries tightening enforcement on expiring passports

Sept. 18, 2014


What is the change? A number of European nations in the 26-country Schengen Area are growing increasingly strict about a requirement that foreign passports be valid at least 90 days past a traveler’s intended date of departure.

What does the change mean? Tourists and business travelers with less than six months remaining on their passports beyond intended travel dates should consider renewing their passports as soon as possible.

  • Implementation timeframe: Ongoing.

  • Visas/permits affected: Passports. 

  • Who is affected: United States and other non-European nationals.

  • Impact on processing times: Seasonal demand for new passports during peak holiday times could cause delays.

  • Business impact: Visa-free business travelers should make sure they have at least six months on their passports upon their date of arrival in Schengen Area countries.

  • Next steps: The U.S. State Department recommends that travelers in need of new passports renew them immediately in order to avoid delays associated with increased demand around the Thanksgiving holiday.

Background: Non-European nationals (third-country nationals) are permitted to visit Schengen Area countries for 90 days within a 180-day period. Because of a rule requiring that passports be valid at least 90 days past a traveler’s intended date of departure, travelers must have at least six months of validity remaining on their passports on their date of arrival. The U.S. State Department reported Sept. 5 that the requirement “has been more strictly enforced” recently, sometimes resulting in travelers being denied airline boarding or entry upon arrival.

BAL Analysis: The tighter enforcement is not the result of any new rule or regulation, and enforcement levels vary from country to country within the Schengen Area. Non-European nationals planning visa-free travel for either tourist or business purposes within the Schengen Area should make sure they will have at least six months remaining on their passport upon arrival. Some Schengen countries also apply the rule to travelers transiting through an airport for several hours to a non-Schengen destination. Travelers who require a new passport should apply immediately to avoid delays. 

This alert has been provided by the BAL Global Practice group

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Manila truck ban lifted; cargo community welcomes development

Manila Mayor Joseph Estrada announced on Saturday the lifting of the Manila truck ban, blamed by many as the cause of port congestion.

The cargo community collectively heaved a sigh of relief but doused cold water on hopes that the port mess will immediately be untangled. All industry executives reached by PortCalls noted it would take many more months to undo the negative effects of the congestion.

At a televised press conference Estrada said the ban will be lifted indefinitely starting noon of Sept 13.

“I am avoiding the conflict kaya (that’s why) we withdraw and let the national government take over,” he said.

Earlier, Cabinet Secretary Rene Almendras, head of the Cabinet Cluster on Port Congestion, said government was looking at asking for emergency powers for President Aquino to lift the Manila truck ban to resolve port congestion.

Asked how the lifting of the ban will affect port decongestion efforts, Christian Gonzalez, head of Asia Region at International Container Terminal Services, Inc, operator of the Manila International Container Terminal, told PortCalls in an email: “It’s going to take months still (to decongest) but we will be able to shorten it as much as possible with everyone working together (operators, truckers, and cargo owners). The first step will be officially convening a task force meeting with all the parties including MMDA (Metro Manila Development Authority) and we will probably make someone completely in charge of coordinating activities until this is solved. Even competitors (all sectors) will have to share information and work together. All other actions will be determined during the meeting.”

Philippine International Seafreight Forwarders Association (PISFA) president Mariz Regis welcomed the lifting of the ban.

“But decongestion won’t happen overnight,” she told PortCalls, adding it’s hard to say when ports will finally be declogged. “Let’s see how things turn out in the first week.”

Regis said “government and various stakeholders must continue to work together” to clear the mess at the ports.

“This is a wake-up call for the country to put in place a roadmap for transport and logistics. We definitely need medium and long-term plans for the sector,” Regis said.

PISFA director Erich Lingad said a return to normalcy at the ports may happen only next year because cargo volumes are now on the rise due to the peak shipping season.

Atty Max Cruz, general manager of the Association of International Shipping Lines, for his part said the lifting of the ban is “good news for the country. But the effects… cannot be felt immediately considering the destructive mess it (ban) has created for business and the supply chain. The lifting of the ban is only the first step on the road to normalcy. It will take a couple of months before things normalize.”

Confederation of Truckers Association of the Philippines president Ruperto Bayocot said the lifting of the ban will normalize port operations “earlier than expected” or within two to four months.

The Department of Trade and Industry has earlier said decongestion will only be achieved by early 2015.

Bayocot told PortCalls he also hopes truck turnaround will now be “four to five times a week from the current three to four a week.”

Sleep-deprived truck drivers perpetually stuck in traffic, he said, can also now “get more sleep”.

Integrated North Harbor Truckers Association (INHTA) president Teodorico Gervacio in a phone interview said they are still waiting for a copy of the order before taking any action.

In addition, the association is also watching out for directives from government, considering there are still many truck-related ordinances currently being imposed by other agencies and local government units.

While the lifting of the truck ban will mean roads closed to trucks will now be opened such as Quirino, Nagtahan, Kapulong, and Sta. Mesa, it will also mean the closure of Roxas Boulevard to trucks, as was the situation pre-Manila truck ban, Gervacio pointed out.

Arnel Gamboa, president of the Supply Chain Management Association of the Philippines, said the lifting of the ban will not translate to “major improvements as the difference (the order brings) is only a few hours (in truck operating) window. The move may be more political in nature than actually bringing the right solution. We need to actually lift the truck ban completely (in Metro Manila or) at least (adopt a) moratorium this peak season to help catch up with backlogs.

“The situation is more serious (and requires a greater solution) than just reverting to the old (MMDA) truck ban scheme. We can’t undo the mess that has unfolded.”

MMDA chairman Francis Tolentino in a statement on the agency’s Facebook account said, “I thank the good Mayor of Manila for his concern in trying to find solutions to decongest the port of Manila. As we revert back to the pre-Manila ordinance situation, I am confident that with the help of all concerned private and government stakeholders, a sustainable solution will be crafted. I will immediately convene the Metro Manila Mayors Special Traffic Committee to craft a responsive scheme that will incorporate the City of Manila’s efforts with that of the national government.”

The controversial truck ban policy, enforced in late February, has caused massive congestion at Manila ports and spawned such problems as pileup of containers, international shipping lines skipping Manila ports due to lack of container space, traffic gridlocks in the metro, and huge losses for businesses due to production delays and unmet delivery commitments.

The ban has translated to higher truck rates of as much as 300%; adoption of port congestion surcharges, among other types of surcharges; and ultimately increased prices of goods. The Bureau of Customs also saw its revenue collection dip in the first month that the ban was implemented.

Also a month into the implementation of the ban, US banking giant Citigroup came out with a study that said the ensuing transportation bottleneck could pare at least 1% to as much as 5% off the country’s gross domestic product (GDP), mostly affecting non-technology export commodities.

The GDP costs were estimated to be as low as P61.2 billion to as high as P320 billion, dwarfing the potential benefits of P30 billion in real terms from the reduced traffic envisioned by the truck ban.

With government and the private sector scrambling to deal with the myriad problems brought on by the Manila truck ban, all kinds of measures have been implemented. These include the adoption of the 24/7 express trade lanes, the last mile route, forcible transfer of overstaying Customs-cleared cargoes to Subic and Batangas ports, and higher storage fees for overstaying cargoes.

The fate of these measures is unclear now that the ban has been lifted.

The Manila truck ban has, however, stirred up activity at the underutilized Subic and Batangas ports, with shippers looking for a way to ship their cargoes without going through Manila ports.

Container traffic at Subic Bay’s New Container Terminal 1 surged 243.7% in August to 8,770.25 twenty-foot equivalent units (TEU), the highest monthly volume this year, from 2,551.75 TEUs posted in August 2013. This brings throughput for the first eight months of the year to 34,746.25 TEUs, up 54.58% from 22,437.75 TEUs year-on-year.

The eight-month volume is just 0.3% or 100.75 TEUs shy of the 34,847 TEUs full-year volume recorded in 2013.

Asian Terminals Inc, which operates Batangas Container Terminal, reported a 254% increase in container throughput at the terminal in the second quarter of the year. The volume in the first half of the year has already surpassed the volume handled for the entire 2013.

PortCalls sources said the Manila congestion has reached Batangas port, with payment for arrastre services now taking two to three hours. There are also reports of container equipment not working properly and the lack of truck operators in the area.


Anamarie G. Franco
Licensed Customs Broker

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GLOBAL: Muslim holiday will delay processing in many countries

What is the change? Around the beginning of October, countries with majority or large Muslim populations across the Middle East, Africa and Asia will shut down for periods ranging from two to nine days in observance of Eid al-Adha.

What does the change mean? Companies and foreign nationals seeking government services should submit applications now to avoid delays caused by the holiday break.

  • Implementation timeframe: Approximately Oct. 5-9, dates to be confirmed.
  • Visas/permits affected: All work permits.
  • Who is affected: Foreign nationals applying for work permits, renewals and other immigration and labor-related services.
  • Impact on processing times: The break will cause a delay of up to one week, depending on local holiday schedules.
  • Next steps: Companies and applicants should factor the holiday period into business timelines and file as early as possible before the first week of October.

Background: Holiday schedules will vary by region and country. The United Arab Emirates announced its public sector will close approximately Oct. 5-9, although precise dates have not been announced.

Several countries in Asia, including Brunei, Malaysia and Singapore, where the holiday is also called Hari Raya Haji, have announced government closures on Oct. 6. India’s Foreigners Regional Registration Offices in Mumbai and Delhi will be closed Oct. 2-6.

Eid al-Adha, or “Feast of the Sacrifice,” is a Muslim holiday celebrating the end of the annual Hajj pilgrimage to Mecca. It also commemorates the willingness of Abraham (Ibrahim) to sacrifice his son Ismail in an act of obedience to God (Allah). Some countries do not confirm the exact dates until the lunar moon is sighted. The holiday, which falls on the 10th day of the lunar month, is expected to fall on Oct. 4 or 5. Other countries use astronomical calculations and fix the date in advance.

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Chassis shortage could lead to gridlock at LA-LB, terminals warn

Bill Mongelluzzo, Senior Editor | Sep 12, 2014 5:13PM EDT

When APL earlier this week informed customers that the APL Norway was being diverted from Los Angeles “due to congestion at Global Gateway South,” it caused shippers that use the Los Angeles-Long Beach gateway to cringe. Would other terminals at the nation’s largest port complex plunge into another round of congestion?

The immediate answer is no, but terminal operators say there is another problem, a chassis shortage that hasplagued the port complex all year since shipping lines divested themselves of chassis. It continues to get worse and could lead to portwide gridlock if it is not addressed quickly and aggressively, terminals say. 

The APL vessel was diverted to Mexico and the imports will be picked up on a subsequent voyage and delivered to Los Angeles. APL on Friday referred all inquiries to its headquarters in Singapore. However, when APL in July first encountered serious congestion issues, a spokesman said the genesis of the problem was the necessity to shift its operations from wheeled (storing containers on chassis) to grounded (stacking them on the ground).

APL for years was the darling of the harbor trucking industry in Southern California because its efficient wheeled operations produced relatively rapid turn times for drivers. APL was forced to shift to a grounded operation when the G6 carrier alliance, of which APL is a member, began sending more ships to the terminal. APL’s volume increased overnight from 15,000 container lifts per week to more than 22,000.

Although APL two months ago responded to its congestion problem by securing more cargo-handling equipment for the yard operations and initiating an appointment system for truckers, the relief was only temporary. Cargo volumes at the APL terminal and at the entire port complex remain unusually strong, despite longshore contract negotiations that have continued well beyond the July 1 expiration of the previous agreement and many importers have diverted cargo to East Coast ports.

According to PIERS, the data division of the JOC Group, imports on the West Coast year-to-date to August are up 6.2 percent. Imports to the East Coast increased 6.4 percent and to the Gulf Coast 6.8 percent.

The fact that import volumes are not letting up substantially has the shipper and marine terminal industries in Southern California concerned. A chassis shortage — some say dislocation — has been festering in Los Angeles-Long Beach all year, and high import volumes are compounding the problem.

This is a problem that New York-New Jersey, the second-largest U.S. port complex, also faces. Most carriers in recent years have struggled financially, and one of their strategies to return to profitability is to shed assets, including chassis. Carriers have sold their chassis to equipment leasing companies at many ports and inland locations the past few years, and this year they have done so at the top two trade gateways.

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Air to ocean shift may be slowing as economy improves

JOC Staff | Sep 05, 2014 3:21PM EDT

A long-term shift from air to ocean freight by shippers looking to cut transport costs and willing to tolerate longer transit times may be slowing as economic conditions improve, according to recent comments from transportation executives.

“I think we saw the bulk of the movement in the past several years when the fuel prices really spiked and people looked for ways to avoid air freight,” Ed Feitzinger, executive vice president for global operations at forwarder UTi Worldwide, said in an earnings call on Sept. 4 transcribed by SeekingAlpha. “Many shippers who had used air freight as a primary mode began their experiment with other means of moving less expensively in order to lower their overall transportation spend.”

Now, he says, “I think the vast majority of that work has already occurred.”

Responding to that statement, analyst Matt Young of Morningstar, said, “So you would say the bulk of a lot of that is in the past.”

Others have made similar observations recently. “The movement of cargo from air to sea appears to have reached its limit, mainly because many shipping lines are maintaining super-slow-steaming to address high fuel costs,” said SS Teo, managing director of Singapore-based intra-Asia container line PIL.

Part of the reason for a slowdown in modal shift may be the improving economic climate, said David Ross, a Stifel Nicolaus investment analyst who covers transportation. "In a downturn, the pace of modal shift accelerates across the transport spectrum as shippers not focused on costs focus in a bigger way. When things pick up, sales are more important, and the quicker the acceleration of the recovery, the better for airfreight."

The shift from air to ocean, which has been barely noticeable among ocean carriers used to handling huge volumes, has hit the air freight industry hard. Seabury, a consultant, earlier this year said air freight’s share of total global containerized or unitized cargo transported declined from 3.1 percent in 2000 to 1.7 percent in 2013, with about one-third of the market share loss attributed to modal shift.

What has been most noticeable, the Seabury study said, was that even fashion items, electronics and and industrial parts shipments, which traditionally required fast transit times only available via air freight, have also experienced significant shifts from air to ocean freight, with trade lanes from Asia hit the hardest.


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