AB5 protests intensified container backlog at Port of Oakland: report

Dive Brief:

• Owner-operator protests against California’s AB5 labor law at the Port of Oakland in July caused import container wait times and the number of vessels waiting at anchor to rise, project44 said in an emailed analysis.
• The volume of containers waiting to get into the port tripled as the protests blocked truck gates, the supply chain visibility company said. Five ships were awaiting berth as of July 24, while container dwell times stretched to more than two weeks.
• Ocean carriers took notice, and some adjusted their vessels’ routes. “By the third week of July, the number of arrivals expected up to the end of August had already fallen by 16%,” project44 said.

Dive Insight:

Port disruptions, especially major ones, can lead to shifts in shipping schedules.

After waiting three days off the Oakland coast, the Maersk Altair headed instead to the Port of Long Beach, project44 said.

The Port of Oakland is all too familiar with disruptions hurting its operations. A COVID-19 lockdown in Shanghai wreaked “havoc on ocean carrier scheduling,” causing a “ripple effect” that depressed cargo volumes and the number of vessels calling the port in April.

Other ports could see vessels and cargo diverted from Oakland due to the July protests, project44 said. 

“As a result of carriers avoiding Oakland, congestion at other ports could be a side effect in the coming weeks,” project44 said.

Protests at three California ports by owner-operators followed the AB5 law’s survival of a trucking industry challenge to the Supreme Court. The law, which seeks to eliminate misclassification and extend employment benefits to more workers, appears poised for enforcement by the state.

The Oakland port resumed normal operations as protests quieted on July 25, officials said. Some drivers continued the protests beyond the first week, but they were relegated to “free speech zones” away from terminal gates under threat of a citation.

Bill Aboudi, president of Oakland-based AB Trucking, said Monday that drivers were back to work and helping tackle the backlog of cargo.

“We’re trying to catch up on everything that got backed up,” he said.

Ships skipping Oakland aren’t only affecting importers: the port is a major exporter of U.S. agricultural products, exporting about $21.7 billion worth in 2019. The U.S. Department of Agriculture announced in May it would offer financial incentives for exporters in Oakland and other ports to help offset associated costs with shifting vessel schedules.

International Dairy Foods Association President and CEO Michael Dykes said in a July 22 statement that his members, which ship milk, cheese and other exports through the port, were growing “increasingly concerned.”

“Dairy exporters are already confronted with rising costs from congestion at the ports, shutdowns, labor shortages, and a number of other factors — we’re hopeful that we won’t have to add more shutdowns to that list,” Dykes said.