PierPass, Act II

PierPass, Act II

PierPass, the program for after-hours terminal gates that harbor truckers in Southern California love to hate, is considering additional measures to boost productivity. With cargo volumes picking up in Los Angeles-Long Beach, and no large terminal expansion projects scheduled for completion next year, encouraging greater use of off-peak gates could help the ports dodge the congestion bullet again in 2006.

Marine terminal operators launched PierPass in July to spread out traffic flows in the nation's most congested port complex. While it may be a bit much to call PierPass an instant success, the extended-hours gates have attracted more traffic than anyone projected. During the peak autumn months, 34 percent of the gate moves were handled on nights or Saturdays. The impact on weekday gate operations was immediate. Long lines outside the marine terminals disappeared, and driving the I-710 freeway during the daytime hours on weekdays has been a breeze.

As in most endeavors, money talked. Shippers wishing to avoid the $80 per-FEU fee that PierPass charges on daytime traffic shifted their pickups and deliveries to nights. On the busiest nights, the terminals in aggregate were processing more than 10,000 truck moves.

Now that the trans-Pacific trade has entered the slack season, PierPass is mulling the complaints that truckers and shippers made during the past four months, and is considering some changes that may be phased in after the first of the year. Probably the most common complaint is that many terminals shut down for the night shift's dinner hour, normally 10 p.m. to 11 p.m.

This interruption hurts truckers, who must comply with federal hours-of-service regulations that limit how long they can work each day. Rather than working the entire PierPass night shift, which runs from 6 p.m. to 3 a.m., drivers adjusted their schedules to work from early afternoon until 10 p.m. When the terminals closed for dinner, the drivers went home, and the second half of the PierPass shift was a bust.

While PierPass cannot force its terminal operator members to stay open during lunch, Bruce Wargo, PierPass president, said some terminals have recently chosen to keep their gates open and run partial yard operations during the lunch hour. While this is costly for terminal operators because it requires hiring extra longshore labor, the results have been positive, and the PierPass members in the new year will consider making this standard operating procedure in the harbor, Wargo said.

Another common complaint is that the terminals close down at 5 p.m., which is the end of the day shift, and reopen at 6 p.m. for the PierPass night shift. Once again, this is a break in the flow of traffic and causes lines of trucks to form at the terminals by 6 p.m.

The West Coast longshore contract allows terminal operators to use flexible start times and open the night gates at 5 p.m. However, under current regulations, shippers who send their trucks to the harbor at 5 p.m. will still have to pay the PierPass fee. PierPass, though, has the authority to extend the hours that are exempt from the fee, so the board will consider starting the free nighttime gates at 5 p.m. rather than 6 p.m., Wargo said. This should produce an uninterrupted flow of traffic into the terminals all day long.

These and other measures that the shipper and trucker communities have suggested should produce an immediate boost in nighttime traffic at the ports. The purpose of PierPass, after all, is to shift traffic from the busy daytime hours to the night shift, not to generate revenue from fees.

Terminal operators in Los Angeles-Long Beach anticipate a return to double-digit growth next year as carriers increase their capacity about 15 percent. Container volumes in 2006 could easily increase by 1 million TEUs. There is no terminal scheduled to open next year that will have a capacity of 1 million TEUs. Terminal operators say they have no choice over the next few years but to double the annual throughput of their existing facilities to more than 7,000 TEUs per acre.

Operational improvements such as greater use of PierPass gates and implementing technology at the terminals would keep congestion at bay for a few more years until the ports can complete the major terminal and rail projects scheduled to come on line by the end of the decade.

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