Port of Oakland Introduces More Supply Chain Stability

While there have been many changes at the Port of Oakland recently, a measure of stability has been achieved with contract extension of its executive director.

Port of Oakland Commissioners have awarded Chris Lytle a new three-year deal keeping him at the helm through July 2019.

“Chris Lytle has transformed the Port of Oakland and raised its visibility as a center for trade, transportation and economic vitality,” said Earl Hamlin, President of the Board of Port Commissioners. “Chris and his staff have the full support of the Board and we look forward to three more years of progress together.”

Some shippers have not been entirely satisfied with some of the changes taking place under the Lytle regime, however.

Since the closure of Ports America, Oakland has been aiding in the transition of cargo volumes by subsidizing off-hour gates (i.e., nights and weekends). The subsidy was always intended to be a short-term fix and was set to expire the end of this month.

Shippers now realize, however, that SSA needs additional hours to process the number transactions necessary to keep containers moving.

In order to continue to provide extended hours, SSA in Oakland has begun assessing a $30 fee on all loaded containers regardless of the time of day the transaction is made. This strategy may stay in place for at least the next 90 days.

SSA will use the $30 to fund continued night gates. These night gates will be Monday through Thursday from 6:00 pm to 3:00 am and will service exports, empties and imports.

According to Don Pisano, president of American Coffee Corporation, this model is different than PierPass in Southern California, which places a fee on all containers moved on the day side with moves on the nights and weekends remaining free.

“Spreading the fee across all containers keeps it lower and having no ‘free' hours will help even out the flow of containers across both shifts,” he explained.

Pisano and others say shippers should not be required to pay for terminal services to two different parties, whether that service is provided within currently established working hours, or any extended hours required to eliminate or ease terminal congestion.

He noted that shippers are paying carriers for the “Terminal Handling Charges” either in the form of a surcharge or imbedded in the total freight charges. The terminal operators are already getting paid by the carrier to handle containers off the ship and through the gates.

The expectation should be that the terminal operator must do whatever is required to handle both the water side and the land side efficiently and follow good and fair business practices in dealing with their own customers’ customers.

“The increased volume of containers which may necessitate additional hours of operation should provide more than adequate increased revenue for any MTO to support the extended hours required to maintain efficiently run gate operations,” said Pisano.

Shippers add that any required increase in revenue should be a matter negotiated between the MTO and their customer – who is the ocean carrier – and not assessed against the shipper who is not party to the negotiations for the servicing of the containers.

That may be easier said than done, noted Karen Vellutini Vice President, Sales & Marketing for Devine Intermodal, an intermodal trucking company headquartered in Sacramento, CA.

“While the ocean carrier is the one entity who both pays the terminal operator and collects charges from the beneficial cargo owner, rock bottom rates in the Transpacific trade leave neither room for ocean carriers to absorb these charges nor are they likely to be able to pass along to their BCO's,” she said.

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