Open Letter to the Port Authorities of California

LILLY + AssociatesGeneral1 Comment

To the Port Authorities of California;

As “America’s Port,” you offer world-class operations and ultra-modern terminal efficiency. Your impact on the regional and national economy is inarguably huge, as you supply more than 900,000 people with jobs and generate nearly $40 billion in wages and tax revenue each year. Your expansive infrastructure and unparalleled support lead industry leaders to assign you an “L.A. Advantage.”

But for months, conflicts boiled between labor unions and leaders of the Pacific Maritime Association. We are all familiar with the challenges associated with such protracted disputes, and shippers, carriers, suppliers, and other logistics professionals all understand that negotiation is a part of business. But what we don’t understand is why we, as innocent bystanders, must share the consequences of this disagreement.

We are not in a position to place blame, but we do feel it is within our right to ask for financial protection in this time of uncertainty. Shippers have already accepted the increased expenses associated with planning alternate routes, but now we are faced with additional charges, particularly those related to demurrage. When congestion and labor-related disagreements clog production at your ports, shippers and truckers then receive bills for the delays. They are ready and waiting to pick up their cargo and haul away the empty containers, and yet obstacles outside of their control are branded their financial responsibility. They pay fines for extended storage, late return of containers, and even “line demurrage,” and truckers increasingly must bear the expense of supplying their own chassis.

We ask only that you treat us fairly, compensating us for our loyalty to your ports and our efforts to tolerate the congestion. You could extend the number of days shipments can sit at the port before incurring fees, or wave the demurrage entirely. You could institute measures to move trapped cargo to nearby storage lots, where shippers can enjoy free or severely discounted storage rates. You could delay the return requirements for containers to a date proportional to the delays caused by port congestion. You could provide truckers with easier access to chassis, or offer them accommodations for their frustration. We believe our suggestions are both reasonable and realistic. There may be other creative solutions as well.

Although we are but one small player in the field, we feel many other logistics professionals share our concerns and recommendations. We look forward to a response grounded in a concrete plan of action and hope for mutual progress.

Respectfully,
LILLY + Associates (on behalf of all US importers/exporters)

LILLY + Associates

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