PORT OF CHAOS
A critical player in the choreography of global trade, congestion at the Port of Oakland is delaying shipments and pushing up prices
As the morning sun climbs over the Port of Oakland, a hive of workers is hustling to move tens of thousands of shipping containers and unclog a lifeline of California commerce.
Thousands more containers await them tomorrow, and the day after, in the largest, longest and most expensive backlog in the history of the port, delaying global shipments of everything from Adidas to Zinfandel.
While impatient vessels float on the San Francisco Bay horizon, waiting a week to enter, “we’ve got to work harder. We get ships in, we get ships out,” said Michael Adams, a muscular Oakland native with the International Longshore and Warehouse Union’s Local 10, who drives the tractors that stack the fully loaded 20- or 25-ton steel boxes.
“If that ship needs to leave at 7 o’clock, we’ve got to get it out of here,” said Adams, 50. “It’s got to be fully loaded.”
The extraordinary surge of incoming cargo — combined with a shortage of labor — is creating unprecedented challenges at the nearly century old
Port of Oakland. Before the pandemic, the ships would generally come straight to berth. Now they wait for space.
“We’re seeing more vessels and, on each one of the vessels, more containers,” as ships grow ever larger, said Port of Oakland Maritime Director Bryan Brandes.
The flood of imports is only part of the challenge. California’s exports also are backed up, including perishable peaches and nectarines from the Central Valley. With too few containers and too many delays, produce shippers say that crops are at risk.
What happened? The pandemic triggered a big buying spree among stuck-at-home consumers. Now, with offices opening up and inventories low, the stuff just keeps coming.
Built in 1927, the Port of Oakland is one of the top three gateways on the West Coast, handling 99% of all containerized goods that move through Northern California. Demand is growing for California’s nuts, dried fruits, wine and other produce from Asia’s growing middle class.
Cargo volumes are shattering records. If the pace holds, the port’s year-end volume would surpass 2.6 million containers for the first time ever, up from 2.46 million in 2020 and 2.5 million in 2019, before the pandemic.
The port lacks enough workers to unload the huge volume of containers. Additionally, traffic backed up when two of Oakland’s nine berths were temporarily out of commission — one due to a vessel’s engine room fire and the other due to major new crane installations.
On Wednesday, more than a dozen ships waited to enter the port, according to Mike Jacob, vice president of the Pacific Merchant Shipping Association. Typically, container ships never anchor; now, six vessels have taken all available spots in the Bay.
Another seven vessels floated outside the Golden Gate. Too deep to anchor, they idle in 2-mile radius “drift boxes” in deeper water.
No one knows how long the chaos will last, though the port, a critical step in the choreography of global trade, expects delays to ease by late summer, as hiring expands. The ports of Long Beach and Los Angeles are also badly congested.
Frustrated, some container lines are rethinking their relationship with Oakland. An Israeli carrier recently diverted the inaugural sailing of its ultra-fast trans-Pacific service vessel to Los Angeles instead. Two other container lines — CMA CGM and Hapag-Lloyd — recently suspended expedited services through the port, according to The Loadstar, a publisher of logistics and supply chain news. 2M Alliance says it will reduce the frequency of Oakland calls, reported Container News.
“When a vessel is sitting there, it’s not making money. They’re paying the crew. They’re running some fuel. So the line costs go up and they charge more,” said Bob Imbriani, president of Team Ocean Services, an international transportation and logistics company. “That’s passed on to the consumer.”
For the bored sailors, “there’s a lot of watching movies, reading books and sleeping,” Jacob said.
On land, a long line of trucks idle, waiting to pick up or drop off shipments.
“It’s been a nightmare. You can’t plan,” said Solange Colonna, director of operations and logistics for The Fresh Connection in Lafayette, which ships California produce to China, Hong Kong and Taiwan. “You just never know how many containers are available, because there’s so much uncertainty as to when those vessels will dock and unload.”
Once a refrigerated container full of produce arrives at the port, it might linger a week or two before it is shipped, she said.
“Peaches and nectarines are perishable. … They can’t sit that long, waiting for a vessel. So it’s risky,” and insurance doesn’t cover such losses, she said. “But people still need food. So we ship knowing there’s a risk.”
With fierce competition for scarce containers, cargo owners are bidding up rates, increasing shipping costs to record levels. Last year, The Fresh Connection paid $3,000 to rent a container; now it’s $6,000.
Idling vessels are expensive, also; the ships aren’t earning money, yet they cost wages and fuel. Delayed truck drivers, who are paid per load, get lower earnings. And businesses must pay a fine if they keep a container longer than a set period of time, even if they can’t physically get their goods.
If ships are delayed at Oakland, they fall behind schedule at their next port, creating a domino effect.
“All of those factors create a perfect storm,” Imbriani said.
“It certainly puts a major question in the reliability of the supply chain — and the order cycle,” he said. “The point for when the goods are ready at origin and they’re made available at their destination has, in some cases, doubled or tripled.”
At the center of the storm are the port workers, Lilliputians alongside the behemoth vessels. Their days start at dawn when they crowd into the union hall to get an assignment. First, there’s a safety talk; then, they scatter to their trucks, cranes, top lifts, docks and colorful canyons of containers.
Moving the big boxes can be a treacherous business, unforgiving of error, where a moment’s carelessness can wound or kill. Containers can slip from grasp. Large metal lashing rods, which secure the box onto the ship, can fall. Workers climb ladders and dodge forklifts. An accident can shut down the operation, and create more backlogs.
“You’ve got to keep your head on a swivel,” said former crane operator and third-generation longshoreman Aaron Wright, amid the roar of lifts, the beeping
of tractors and the squealing of truck brakes.
Stacking and unstacking the containers “is a Rubik’s Cube, with everything needing to go different places,” said Melvin Mackay, 68, vice president of Local 10 with 30 years of dock experience.
Perched behind the controls of an insectlike tractor, Oakland native Aaron Laird, 44, moves boxes with focus and precision. Directed by radio, he navigates the yard to find the parking spot of each box — driving to Baker 405, for instance, or Apple 118. Despite the pressure, he doesn’t rush.
“Safety first,” Laird said. “It’s a hard day but it’s a good day. It’s feeding a family. I love my career.”
The surge in demand means “more work, more money,” he said. “It’s a brighter future.”
Gone are the days, say port veterans, when Oakland was just a quick “turnaround port,” where ships were smaller and could be serviced in 24 to 36 hours. Now the largest ships, some nearly as long as the Empire State Building, demand two to four full days and nights of work.
To ease the chaos, the port is enlisting three new cranes, the tallest deployed on the West Coast. All nine berths are now back in service.
About 1,000 potential new employees are being drug tested at Oakland Marriott City Center. Hundreds of “casuals” are being trained for skilled jobs, although the union says more equipment and trainers are needed.
Peak shipping season is coming soon. Businesses will need imports of backto-school items, Halloween goods and supplies for newly reopened offices. Farmers will export freshly picked almonds, walnuts and pistachios.
“It will take a number of months to get to where we’re really seeing improvement and this backlog gets cleared up,” said the port’s Brandes. He’s aiming for August.
“Historically, there have always been peaks and valleys,” he said. “But I’ve never seen this long, extended level of demand.”