Hanjin to Quit Portlandby Staff
World Cargo News, October 22, 2013
Hanjin Shipping has announced it will stop calling at the Port of Portland in January 2014. On 18 October the Port of Portland issued a statement saying "Hanjin Shipping has notified the Port of Portland and terminal operator ICTSI Oregon that it plans to withdraw direct call service at Terminal 6 in January 2014, citing escalation of costs as the primary driver for the decision.
"Hanjin is the largest container carrier calling Portland's Terminal 6. The service represents approximately 80 percent of container throughput at the terminal, averaging about 1,600 containers per week. Hanjin has had a presence in the community since 1994, and has contracts with many of the area's largest shippers."
The port has not given up hope that Hanjin will change its mind and shippers are also pressing the line to stay. Their containers will now be rerouted through Seattle, where Hanjin has significantly lowered its costs as part of a new lease agreed in December last year. Nevertheless, Oregon shippers face an increase in trucking costs of "$500 to $1,000 per container" according to the port.
A long drawn out labour dispute has hampered ICTSI ever since it started its 25-year concession at T-6. It is in the middle of a battle between the International Longshore and Warehouse Union (ILWU) and the Port Authority over jurisdiction for reefer plugging, unplugging and monitoring.
As part of its concession ICTSI agreed to carry on all existing labour arrangements, including using labour from the International Brotherhood of Electrical Workers for landside reefer work. The ILWU tried to argue that concessioning T6 to ICTSI meant this work now came under its jurisdiction and embarked on a campaign to pressure the Port, ICTSI and shipping lines to agree.
The ILWU campaign included go slows and work disruptions that severely hampered ICTSI's ability to deliver an efficient service. The jurisdiction argument was eventually heard in the US National Labor Relations Board (NLRB) where a terminal manager at T6 testified that ILWU officials had told him it "was their plan to run ICTSI out of town".
The Board found that "by threatening or impliedly threatening to shut down or otherwise disrupt ICTSI's operations", failing to supply services and inducing employees to disrupt operations the ILWU had engaged in unfair labour practices and ordered it to cease. It appears the order made no difference and an ICTSI spokesperson told The Oregonian that poor productivity and high costs were the main reason Hanjin finally walked away, a move that will cost the Portland ILWU local $250,000 a week in lost wages.
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