An auspicious start

An auspicious start

One month into the PierPass program for night and Saturday operation of port terminal gates at Los Angeles-Long Beach, even the program's critics begrudgingly admit it has potential. No, it's not perfect - cargo owners and harbor truckers are quick to cite anecdotal evidence of problems with billing, access to terminal gates and communication with terminal operators.

Those problems must be corrected if terminal operators are to achieve their goal of moving 40 percent of the ports' container volume during off-peak hours. Just like the banking commercial in which the customer service representative says his bank completes one transaction perfectly and then repeats it millions of times, PierPass must strive for perfection in a port complex that will handle nearly 14 million TEUs this year.

Anecdotal problems, however, should not obscure the bigger picture. PierPass is bringing about important changes in an industry that instinctively resists change. The ports' 13 marine terminal operators, traditionally fierce competitors, are coordinating their operations for the good of the port community. All terminals now offer full-service gates Monday through Thursday nights, with a Saturday daytime gate each week, regardless of whether traffic volumes warrant the extended gates. Truckers demanded this level of coordination, and they got it.

Importers and exporters really are changing the way they do business. Cargo interests, from the big-box retailers to shippers who import only a couple of dozen containers a month, are moving more freight at night and on weekends. Terminal operators had anticipated that only the largest shippers would support PierPass. In fact, some smaller shippers with secure container yards are receiving shipments at night to avoid paying the traffic-mitigation fee, even though they do not process the cargo until the next morning. The big retailers with round-the-clock warehouse operations indicate they now move 50 to 70 percent of their cargo in the off-peak hours. Anyone who drives the Interstate 710 freeway to the ports during the daytime will notice the reduction in truck traffic.

Numbers published by PierPass corroborate the changes. Each night 8,000 to 9,500 containers move through gates during off-peak hours. Traffic during the Saturday gate hours jumps to more than 11,000 moves. On a weekly basis, shippers in Southern California are consistently moving 30 percent of their containers during the off-peak hours. Besides fewer daytime traffic jams on freeways, benefits include reductions in air pollution and congestion at marine terminals.

However, if PierPass is to generate widespread support, terminal operators must address the valid complaints raised by shippers and truckers. The loudest complaint concerns the shutdown of terminals for the longshore workers' dinner hour, which truckers say often extends beyond one hour. Trucking companies say their drivers frequently are caught in line or even stuck within a terminal when it shuts down for the dinner break. This problem is solvable. Terminals can stagger dinner hours, hiring enough workers to ensure the facility remains open for the entire night shift.

Shippers say PierPass could improve its communications with the trucker community. Importers designated certain containers for night moves to avoid the traffic-mitigation fee of $40 per TEU, but PierPass did not update its system and released some of those containers during the day shift - a mistake that subjected the boxes to the fee.

PierPass may also have to be more flexible in its hours of operation. Closing a terminal from 5 p.m. to 6 p.m. to coincide with the designated longshore work shift interrupts operations. Also, as cargo volumes increase for the peak season, shippers are finding that more containers are available for pickup on Friday night, when PierPass does not offer working gates.

What truckers want above all else is improved turnaround times. Drivers are supporting PierPass now because many trucking companies are paying them a bonus to work nights. Terminals need to reduce gate times and expedite truck moves within the yards so drivers get one or two extra turns per day. Drivers are paid by the trip, not by the hour. The most efficient terminals are already attracting plenty of drivers under PierPass, while the least efficient terminals are struggling to get enough truck capacity at night.

Ports throughout the country are watching PierPass. If cargo volumes continue to increase at 10 percent or more at gateways in the Pacific Northwest and on the East Coast, those ports could face the kind of congestion Southern California saw last year. If PierPass works out its problems in the months ahead, look for similar programs at other ports within the next year or two.

Bill Mongelluzzo is West Coast editor of The Journal of Commerce. He can be contacted at (562) 432-0311, or at bmongelluzzo@joc.com.