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Mar. 17, 2014

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NEW CUSTOMS CHIEF REASSURES TRADE COMMUNITY FRESH OFF HIS Senate confirmation, U.S. Customs and Bor- der Protection Commissioner Gil Kerlikowske this month acknowledged industry concerns that he wouldn't balance trade facilitation and security, but said he understands the importance of doing so. The Senate approved President Obama's nomination of Kerlikowske to Customs, giving the agency its first politically appointed chief with congressio- nal approval since 2009. Some in the trade community have worried that Kerlikowske, a former U.S. drug czar, would prioritize cargo security at the expense of ensuring goods move quickly and efficiently in and out of the country. "I understand and recognize the extreme importance and balance of not only the physical security of our border but also our economic security," Kerlikowske said at the CBP's annual East Coast Trade Symposium in Washington on March 7. Kerlikowske said he would maintain the agency's "open-door" policy with shippers, forwarders and other transportation providers. Since being nominated by Obama in August, Kerlikowske said he has reached out to industry stakeholders, including Chamber of Commerce head Tom Donohue. Acting CBP Commissioner Tom Winkowski has also continually briefed Kerlikowske on Customs issues and challenges. N O R T H A M E R I C A N S H I P P E R S got a not her reminder this month that longshore labor isn't the only volatile labor link in their supply chains. Truck drivers at Port Metro Vancouver picketed the British Columbia port to protest extensive delays at marine terminals that the truckers say are making their economic situation intolerable. As tensions mounted in early March, the Cana- dian government appointed veteran mediator Vince Ready to resolve the crisis. Ready devel- oped a plan, which he submitted to the truckers, but they said it was too little, too late. The strike quickly turned ugly, with some drivers who dared to work being pulled out of their cabs and beaten. Vancouver is just one of many major North American ports facing terminal con- gestion, partly because ever-larger vessels are discharging thousands of containers during each call. In Los Angeles-Long Beach, for example, vessels capable of carrying 8,000 20-foot con- tainer units often discharge and reload 5,000 containers per vessel call. Up to 10,000 con- tainer moves have been reported from larger, 10,000- to 14,000-TEU vessels. East Coast ports also will grapple with handling larger container ships that the P3 and G6 carrier alliances likely will deploy on trans-Atlantic routes, according to Drewry Maritime Research. The alliances' con- solidation of services means much larger ships could replace the 3,500- to 6,500-TEU vessels currently deployed, "subject to USEC/USGC ports being able to handle them satisfactorily," the London-based analyst said. The P3 mem- bers — Maersk Line, Mediterranean Shipping Co. and CMA CGM — and the G6 partners — Hapag-Lloyd, OOCL, NYK, Hyundai Merchant Marine, APL and MOL — plan to launch their services in the second quarter, assuming they get regulatory approval. The problem is that many eastern U.S. ports have been preparing for the arrival of deep-draft, 8,000-TEU-plus ships starting in mid-2015, when new Panama Canal locks were originally due to open, not the second quarter of this year, Drewry noted. A shortage of chassis also is exacerbating conges- tion. Truckers at the Port of New York and New Jersey, for example, say they waste hours wait- ing for chassis at equipment yards. "There'll be 40 guys in line and one chassis coming in every 20 minutes," said Juan Rolon, vice president of Port Driver Federation 18, an owner-operator group. Weeks of long delays have left truck- ers reluctant to return chassis to congested terminals where drivers may be unable to secure roadworthy replacement. The termi- nal delays could get worse with the expected spike in import traff ic this month. Con- tainer imports in March are forecast to jump 12.4 percent year-over-year now that factories in Asia are back in full operation following the Chinese New Year celebration, according to Global Port Tracker. February numbers aren't in yet, but the report, published monthly by the National Retail Federation and Ben Hackett Associates, is expected to show an 8.8 percent decline in imports from February 2013. "Con- gestion has been a problem for many ports, so operations will need to improve to handle the expected surge in the coming months," said Jonathan Gold, the NRF's vice president for supply chain and customs policy. Port conges- tion was one of the hottest topics at the JOC's TPM Conference in Long Beach this month. Industry experts said the ports and terminal operators must work more closely with the harbor trucking industry and beneficial cargo owners to develop and implement an action plan, or the mega-ships being deployed by carrier alliances will have a serious impact on international trade. The Port of Virginia is forming an industry task force to find solu- tions to problems that have caused delays at Hampton Roads container terminals dur- ing recent weeks. New York-New Jersey announced its own port efficiency task force in December. A report from that task force is due in June. Spotlight 6 THE JOURNAL OF COMMERCE MARCH 17.2014 6 THE JOURNAL OF COMMERCE PORT DRAYAGE ISSUES HEAT UP

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