Stevedores shutdown Oakland terminal operated by Matson Joint Venture partner

by Michael Hansen, Hawaii Shippers Council, March 29, 2016

The American Shipper Magazine published on March 29, 2016, a news article, “Port of Oakland terminal reopens after Monday closure.” The article reports that members of the International Longshore and Warehouse Union (ILWU walked off and shutdown on Monday, March 28, 2016, the Oakland International Container Terminal operated by Matson Inc. (NYSE: MATX) joint venture partner, Stevedoring Services of America Terminal Inc. (SSA).

The Oakland International Container Terminal occupies Berths Nos. 55 – 59 in the Port of Oakland’s Middle Harbor. There was a dispute about start work time, and the ILWU stevedores walked off the job and shutdown the terminal on Monday, March 28, 2016. Work resumed Monday night as regularly scheduled.

The adjacent Matson Terminal occupies Berths Nos. 60 – 63 also in the Port of Oakland’s Middle Harbor and is operated by SSA on a joint venture basis with Matson. The Port of Oakland advised the Hawaii Shippers Council on Tuesday morning that there was no impact on the Matson terminal.

SSA Terminals LLC (SSAT)

Matson Navigation Company Inc. (MNC) calls at container terminals on the U.S. West Coast (USWC) operated through the joint venture company, SAA Terminals LLC (SSAT). MNC has a 35% interest in SSAT and the majority interest is held by SSA Marine Inc. (formerly Stevedoring Services of America Inc.) through their subsidiary SSA Ventures, Inc. SSAT provides container terminal and stevedoring services to various carriers at six terminal facilities on the USWC, including to MNC at three of those facilities (Long Beach, Oakland and Seattle). Matson records its share of income in the joint venture in operating expenses within the ocean transportation segment. MNC’s wholly-owned subsidiary, Matson Terminals Inc., operates container terminals in Hawaii at Honolulu and neighbor island ports of Kahului, Hilo, and Nawiliwili. Previous to the mid 1990’s, Matson Terminals Inc. operated their own terminals at four USWC ports and provided third party terminal services to other container shipping companies including their most important client, Nippon Yusen Kaisha Ltd. (NYK). After NYK decided to establish their own USWC terminals, in July 1999, MNC and SSA Marine Inc. signed an agreement appointing SSA Terminals LLC (SSAT) subsidiary as the manager of terminal and stevedore operations at Matson Terminals Inc. facilities on the West Coast. SSA Marine Inc operates a range of marine terminals including for container, breakbulk and bulk cargoes around the US and in Mexico, Panama and Vietnam. SSA Marine Inc. is subsidiary of Carrix, Inc. , a Seattle, Washington State, based, privately held operator of marine and rail terminals worldwide.

Key excerpts:

Oakland International Container Terminal was open for business Monday evening after a dispute about starting times shut the SSA Marine facility down during the day.

The Port of Oakland's largest container terminal reopened Monday evening after a dispute between its operator and longshoremen over starting time shut it down during the day shift, the Northern California port said.

Craig Merrilees, a spokesman for the International Longshore and Warehouse Union, told American Shipper 22 longshoremen at the Oakland International Container Terminal (OICT) were dismissed by SSA Marine after they arrived for work at the regular starting time stipulated in their contract instead of earlier as the company wanted. An additional 44 dockworkers at OICT also refused to work in solidarity with the 22 employees that were sent home.

Merrilees said an arbitrator ruled later in the day that the 22 workers were improperly dismissed and would be made whole, but that the other 44 employees had acted improperly by also refusing to work.

SSA said it is appealing yesterday's ruling to a panel of three arbitrators today, but that operations has resumed last night.

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Monday’s Oakland container terminal shutdown explained

by Michael Hansen, Hawaii Shippers Council March 31, 2016

The American Shipper Magazine published on March 31, 2016, the news article, "Oakland terminal shutdown first test of new arbitration system,” explains what lead to the stevedore walkout on Monday, March 28, 2016.

To recap, certain members of the International Longshore and Warehouse Union (ILWU) reportedly refused to report to work at 06:45 hours on Monday morning as ordered by SSA Marine Inc. operator of the Port of Oakland’s largest container terminal, the International Container Terminal. When those workers reported to work after 07:00 a.m., they were dismissed for the day. This led to the rest of the stevedores walking off the job for the day shift.

As it turns out, the ILWU equipment operators (terminal gantry crane and container yard handling equipment operators) are paid an extra hour of overtime to start work at 06:00 hours so that when the ship gangs start at 07:00 hours, work can commence without delays getting the equipment up and running. Instead the equipment operators would typically start after 07:00 hours and work would not commence until 07:20 or 7:30 hours.

As the article points out, this industrial dispute will go to and be a test of the new arbitration process established in the “Coast Contract” contract agreed to after the four month long West Coast Port Slowdown from October 31, 2014 to February 20, 2015.

Prospects for positive future outcomes of West Coast waterfront labor relations will not be good if the new arbitration process does not rule in favor of the employer in this clearcut instance.

Key excerpts:

The dispute between dockworkers and employers over starting times, which caused a shutdown at the Oakland International Container Terminal Monday, will be resolved using new arbitration system agreed to last year as part of the ILWU-PMA contract.

An arbitration panel hearing a dispute about starting times for longshoremen at a terminal in the Port of Oakland met from 3 p.m. to 10 p.m. on Tuesday.

After longshoremen refused to get into machinery before the 7 a.m. starting time on Monday and were sent home for the day, the Port of Oakland’s largest container terminal, the Oakland International Container Terminal was shut down for the day. The terminal opened for a second shift on Monday and operated normally on Tuesday.

According to Stevedoring Services of America, longshoremen who operate container handling machinery are paid from 6 a.m. to 7 a.m. so that when the terminal opens at 7 a.m., the terminal can immediately being operations. But they say ILWU members are not entering the terminal until 7 a.m., and that operations do not actually begin for another 20-30 minutes.

The dispute is an early test of a new arbitration system agreed to by International Longshore and Warehouse Union and employers represented by the Pacific Maritime Association. The new arbitration system was agreed to under a contract approved last year following contentious negotiations that contributed to serious congestion issues at ports up and down the U.S. West Coast.