Local government and industry officials at three ports on the opposite end of the spectrum in California are lobbying members of Congress and U.S. Customs to adjust how the agency is implementing forced budget cuts because reductions in manpower to clear cargo are beginning to harm the maritime industry, with potential losses of millions of dollars per day just around the corner.
Port stakeholders say their unique circumstances mean that Customs and Border Protection's initial elimination of overtime hours in response to the automatic, across-the-board federal budget cuts initiated March 1, known as sequestration, has a disproportionate effect on their operations.
CBP notified the public in February that the spending cuts could add days to cargo exams and cause other operational delays at border checkpoints.
Officials say the impact on cargo flow has been minimal so far at the ports of Los Angeles and Long Beach, but warn of major congestion if volume picks up and planned workforce furloughs go into effect April 21. But Port Hueneme, a small port about an hour north of Los Angeles, is already feeling the effects of CBP's staffing reduction, according to Port Director Kristin Decas.
The San Pedro Bay port complex, the nation's largest for containerized imports, operates much longer hours than most U.S. ports to accommodate the high traffic volumes and should be spared from the cutbacks because of its economic importance, Michele Grubbs, vice president for the Pacific Merchant Shipping Association, which represents area terminal operators, said in a phone interview.
"We are looking for Customs to be able to evaluate and make manning decisions based on risk. And when you're looking at 40 percent of the nation's cargo coming through this gateway they should have the flexibility to staff accordingly," she said.
Few other ports regularly operate night and Saturday gate hours and port authority officials at the ports of Oakland, Seattle and New York and New Jersey confirmed that their facilities had yet to experience any negative impact from CBP's new operating schedule. Port authorities with responsibility for airports were more worried about how Transportation Security Administration and CBP staffing would impact airline security and delay passengers.
Oakland International Airport could lose some potential business in the short term because two international airlines have filed for landing rights and if the requested slots fall outside normal CBP operating hours their applications could get denied, port authority spokesman Isaac Kos-Read said.
Grubbs suggested CBP should evaluate its operations nationwide rather than implement the same level of cutbacks at each port, adding that if the Southern California ports were correctly staffed in the first place based on volume there wouldn't be a need for overtime. More than 100 unit trains each week and 30,000 trucks per day move in an out of the two ports.
PMSA earlier this month argued its case in letters to Gov. Jerry Brown, California's two senators and Reps. Janice Hahn and Alan Lowenthal. On Thursday, PMSA and the International Longshore and Warehouse Union sent a follow-up letter to Sens. Diane Feinstein and Barbara Boxer urging intervention to get CBP to restore overtime and cancel furloughs.
"Absent a change in policy to provide greater flexibility to Customs for overtime services at California seaports, the net effect of sequestration will be congestion at California's marine terminals. California's ports will ultimately choke on the volume of cargo resulting in a range of problems from congestion, additional pollution, spoiled food products and missed opportunities for agricultural exports," the joint letter from terminal management and labor said.
Most of the the $754 million in cuts to CBP's budget will come from salary expenses, including a hiring freeze and reductions in travel, overtime, contract letting, supplies, training, and facility maintenance. Under the furlough policy, CBP officers will be required to take one unpaid day of leave per pay period through the end of the fiscal year on Sept. 30. The reduction in man-hours is equivalent to the elimination of 2,750 officers, or more than 10 percent of the workforce at border checkpoints, Homeland Security Secretary Janet Napolitano said in congressional testimony last month.
How a stop-gap funding bill passed by Congress Thursday will alter CBP's plans is unclear at this time. The continuing resolution funds the government for the remainder of the fiscal year. It essentially locks in the $85 billion in budget cuts from the sequester, but gives flexibility for how to spread the reductions to some departments like Homeland Security. Hiring freezes, elimination of overtime and other savings measures were planned based on the continuing resolution that was scheduled to expire March 27. DHS will now reevaluate spending activities based on the new funding measure.
If the furloughs kick in terminal operators in L.A./Long Beach expect to lose four operating hours daily, which will cause cargo back ups and cost millions of dollars each day in lost revenue and expenses, not including the ripple effects on motor carriers, railroads, and warehouses that depend on the ports, Grubbs said.
Beneficial cargo owners, in turn, could experience delayed shipments.
"Whatever Customs is looking at saving in a year, we're probably losing in a month here," the PMSA executive said.
CBP has told terminals it will staff the gates and conduct cargo exams between 8 a.m. and 4 p.m. and from 6 p.m. to 2 a.m. Several terminals that are open 20 hours - from 7 a.m. to 3 a.m. - will go to a 16-hour schedule. Terminal operators fear that CBP has given optimistic assessments and that shifts could be curtailed even more than four hours at some facilities, Grubbs said.
Customs "has done an exceptionally good job of working with us so that operations are not significantly impacted," John Holmes, director of operations for the Port of Los Angeles, told American Shipper
The border agency uses overtime to flex its workforce and accommodate terminals' special needs, such as opening an hour early to start loading intermodal trains.
So far, the elimination of overtime has impacted those types of personalized services and exit gates for trucks where CBP officers operate drive-through radiation portal monitors to check for radiological or nuclear weapons in a container. Officers currently are trimming a half hour on either end of their shifts to stay within regular on-duty hours. It takes about 30 minutes for the detection machines to power up and down, time that previously was covered through overtime so officers could align their work days with the terminal hours. Terminals now have to close their inbound gates by 3 p.m. or earlier to make sure all the trucks that enter can get out of the facility with a load in time, Holmes and Grubbs explained.
"Our business model is that Customs is available to use around the clock," Grubbs said. "So now, we're trying to schedule our work in the time that they're available."
Lower-than-normal volumes due to the recent Chinese New Year, during which factories in China shut down for one or two weeks, have kept cargo moving relatively smoothly, but the calm could change when vessel calls pick up again in the next two weeks, she said.
Vessel boardings by CBP and the U.S. Coast Guard could be delayed at that point, officials said. CBP and the Coast Guard have to certify that a vessel is safe, doesn't pose a security threat and is free of Asian gypsy moths or other pests that could harm native plant species before it can unload its cargo.
The Port of Los Angeles has offered to use port police to manage traffic at the truck gates and free up CBP officers to operate radiation portal monitors, Holmes said, adding that sharing resources has not yet been necessary.
Last Friday, Reps. Hahn and Lowenthal wrote CBP Deputy Commissioner David Aguilar asking him to reevaluate the decision to cut overtime at L.A./Long Beach to meet the sequester mandate.
"Permitting CBP officers to work overtime at the ports of Los Angeles and Long Beach is vital in order to prevent terminals from being overwhelmed with container traffic during the normal five day work week. Removing the CBP personnel that make these night and weekend shifts possible will seriously restrict the flow of goods at our nation's largest port complex and thereby jeopardize our economic recovery. These complications must not be taken lightly," the California Democrats said.
"If fewer CBP officers are assigned to our nation's ports of entry, not only will it cause a substantial backlog of scanned cargo, but it will risk endangering our nation's security," they added.
Eliminating overtime that supports extended gates and then reducing staff during normal hours means the busiest port in the nation will take the brunt of the spending cuts, Grubbs argued.
Meanwhile, the effect of the sequester cuts is "catastrophic" at Port Hueneme, Decas said during a timeout at the American Association of Port Authorities spring conference in Washington earlier this week.
The port handles more than $7 billion worth of cargo annually, including large volumes of automobiles, fresh produce, and heavy equipment.
Hueneme frequently receives vessels on weekends, but without overtime there are no CBP officers to board the vessels and give the okay to unload. Vessel operators will be forced to anchor in the harbor until Mondays, which will costs them a minimum of $25,000 to $50,000 per day in charter, crew and other expenses.
So far there haven't been any weekend delays because one vessel arrival was delayed by bad weather, but two ships have arrived mid-week outside CBP's approved shift and had to wait, Decas said. In one case, the delay cost the carrier $6,000 and in the other 103 longshoremen sat idle at the dock and had to be paid by the terminal, she said.
Port authority officials have pleaded with CBP officials in the Los Angeles field office and in Washington to look at each port individually rather than use a one-size-fits-all formula for saving money, which amounts to a few hundred dollars for a vessel inspection. They want CBP to reinstate overtime or allocate personnel from the Los Angeles/Long Beach office for weekend work. Rep. Julia Brownley, who represents Port Hueneme in Congress, wrote Napolitano asking the department to provide sufficient resources for Port Hueneme to remain open for longer periods.
"We're talking about minuscule cuts compared to the losses incurred by the carriers," Decas said.
Commercial vessels must continuously turn at ports to make money and can't afford to sit, according to maritime industry officials.
"Our customers are willing to pay the overtime. Just come up with a flexible shift scenario," Decas said. - Eric Kulisch