With average truck turn times stagnant, despite declining container volume growth through the Los Angeles-Long Beach port complex, Port of Los Angeles executive director Gene Seroka blasted current practices and urged adoption of a port-wide trucker appointment system and the relocation of chassis storage to near-dock sites. With the summer peak-shipping season two months away, Seroka said there’s no time to waste
In order to avoid another peak season marked by terminal congestion and equipment dislocations, Seroka said the ports of Los Angeles and Long Beach have been discussing these much-needed productivity measures with terminal operators, carriers, truckers, and chassis providers for months, but so far no actions have been taken.
“We have had multiple meetings. Now it’s time to act,” Seroka told JOC.com.
Truck turn times in the nation’s largest port complex, which handles more than one-third of all US containerized imports, are still at an unacceptable level, Seroka said, despite volumes having subsided in early 2019. According to truck mobility data published by the Harbor Trucking Association (HTA), the average visit time in April was 83 minutes, the same as in March. While April’s turn times were down from a peak of 98 minutes in January, they are still higher than the 72-minute truck visit time in April 2018.
In 2018, the average truck turn times were 82 minutes or less from January through September. Turn times jumped to 90 minutes in October and have remained at 90 minutes or higher through February this year. At the same time, laden and empty container volumes in the first four months of 2019 increased only 0.1 percent from the same period in 2018.
Trade tensions a shared problem
Average truck turn times last year were generally below 80 minutes, but began to climb last fall when imports surged, due in part to front-loading of shipments during the US-China trade war. They remained elevated into this year, even as container volumes dropped in recent months during the post-Lunar New Year factory shutdowns in Asia. Like the ports, truckers and logistics providers are concerned that the situation could get worse. “We need to prepare for the upcoming peak season now,” Seroka said.
Interviews with terminal operators, logistics providers, and truckers, and an analysis of the HTA truck mobility statistics, indicate that conditions vary considerably among the 12 terminal operators in Los Angeles-Long Beach. Turn times in April ranged from a low of 34 minutes to a high of 124 minutes. Each facility has its own challenges, with some terminals in the process of upgrading their software systems, others dealing with new vessel deployments that occurred in April, and others adjusting to the shifting of calls by carriers involved in vessel-sharing alliances.
Scott Weiss, vice president of business development at Port Logistics Group, said truckers and logistics providers encounter a laundry list of issues at the Los Angeles-Long Beach complex, including terminal overcrowding; terminals upgrading their systems, causing major delays at the gates; terminals running out of storage space, creating difficulties in accepting the return of empty containers; and a lack of availability appointments due to terminals using the appointment system to control congestion. “In the first part of April, volume was very slow but delays did not go away. In the second part of April, it seems like volume was back to normal for this time of year, and the delays did not change much,” he said.
One problem shared by all of the terminals over the past six months, and a significant issue, Seroka said, is the US-China trade war. A huge equipment imbalance, caused by a surge of imports late last year due to front-loading of shipments, and a simultaneous drop in exports, has disrupted the normal flows of equipment eastbound and westbound. The decline in exports to China is intensifying. Last year, US containerized exports to China declined 24.5 percent from 2017. China is the largest trading partner for Los Angeles-Long Beach, and with US exports of agricultural products and scrap recyclables expected to decline further this year, the impact on the port complex could be even greater. “We cannot underestimate the impact the trade war is having,” Seroka said.
Some terminals are still struggling with a surplus of empty containers that must be returned to China due to blank sailings in recent months that reduced the vessel capacity needed to handle the empties. As a result, some terminals continue to sporadically refuse empty returns. When this happens, trucker productivity drops, and shippers incur late fees, known as detention, for failing to return equipment before the free time expires.
A knock-on effect of the container imbalances is a mixture of chassis shortages and imbalances that seem to move daily from terminal to terminal based on vessel calls and departures. “The decision by ocean carriers to redirect empties is creating chassis surplus terminals that require the IEPs (intermodal equipment providers) to reposition equipment to chassis deficit terminals. This imbalance of rail and chassis is contributing to longer-than-usual processing times at some of our terminals,” said Noel Hacegaba, deputy executive director of Administration and Operations for the Port of Long Beach.
The problems involved in returning empty containers to terminals, along with the shifting surplus/deficit chassis situation, is impacting trucker productivity. Truckers have fewer opportunities for completing dual transactions — dropping off an empty container and picking up a full one — in the same trip. Their options for securing appointments at the terminals are limited, as appointment slots fill up quickly during peak traffic periods.
Alan McCorkle, vice president of Yusen Terminals/Ceres Terminals in Los Angeles, said overall port-wide conditions are better today than they were in November-December, when carriers flooded Los Angeles-Long Beach with extra-loader vessels to carry the surge of pre-tariff imports and disrupted the regularity of vessel calls.
However, for some terminals, April is a transition month when carriers often change their schedules of weekly services for the coming year. “At Yusen, we replaced two old deployments with two new ones. Everyone, the railroads, truckers, IEPs, have to adjust to it,” he said. Yusen, one of the better operating terminals in the harbor, experienced an increase in average turn times to 62 minutes in April from 59 minutes in March, according to the HTA truck mobility numbers.
Fenix Marine Services, the former APL terminal in Los Angeles, continues to feel the impact of upgrading to a new operating system, with average turn times soaring to 140 minutes in March. Turn times improved to 124 minutes in April, according to the HTA, but that is still higher than the port average. Sean Pierce, Fenix president and CEO, said adjustments have been made, and he is looking for average turn times to drop below 100 minutes this month and to continue to improve in the coming months.
In addition to the new operating system, Fenix has completed installation of four super post-Panamax ship-to-shore cranes, and construction has been completed on an access road. “The new cranes, combined with the reconfiguration and widening of the berth causeway, has resulted in improved flow,” Pierce said.
Occasional one-off issues can also cause delays that are reflected in the turn times. Daniel Bergman, vice president of operations at Total Terminals International (TTI) in Long Beach, said US Customs and Border Protection had a brief outage at its radiation portal monitor in April, causing delays in the inspection of containers. Even so, April was still a good month at TTI, with average turn times dropping to 81 minutes from 96 minutes in March. Bergman noted that on Monday, TTI set a personal record of handling 2,506 moves from a single vessel in an eight-hour shift. TTI worked nine ship-to-shore cranes against the vessel, with each crane averaging 34.8 moves per hour. Generally, in Los Angeles-Long Beach, crane productivity is less than 30 container moves per crane per hour.
Port-wide productivity push
Despite the anecdotal improvements, Seroka said terminal operators must come together immediately to improve overall productivity. Back-to-school imports will begin moving in June, followed immediately by holiday shipments that will build during the summer and peak in late fall. The first order of business must be to adopt and implement a port-wide truck reservation system. “They (terminal operators) say it’s not needed. I say it is,” he said.
Truckers generally support Seroka’s view and would like to move forward with a single appointment system with all terminals having the same rules and the data being funneled through a single portal, said Weston LaBar, CEO of Harbor Trucking Association. “We’ve been in lockstep with him from day one of this,” he said.
Seroka said the Port Optimizer, developed by GE Transportation with support from the Port of Los Angeles, is prepared to launch a port-wide truck reservation system. Some terminals, however, utilize a portal developed by Advent/eModal. LaBar said the HTA is agnostic as to which portal is used, as long as it is efficient and allows for seamless integration with user systems.
Seroka said it is also urgent that the ports locate and lease out a site — or sites — within the harbor as stop/start storage locations for chassis so the equipment can be removed from terminals, freeing up an estimated 50-80 acres for cargo handling. “We have to move these chassis out of the terminals now,” he said.
Ports for years have talked about removing chassis from marine terminals to free up valuable waterfront acreage for cargo handling activities, said Bill Rooney, vice president of trade management, North America, at Kuehne + Nagel and a former carrier executive. “It makes sense,” Rooney said, although he noted that getting all port stakeholders to agree upon a solution is not easy.
The effort to locate appropriate parcels of land for chassis storage and to lease them to operators who are comfortable employing International Longshore and Warehouse Union labor has been underway for more than a year now, although there is no success story to report. Truckers agree that chassis do not belong on the terminals, and that chassis shortages and dislocations represent one of the biggest hindrances to cargo fluidity. However, with an average of more than 35,000 truck moves per day in the port complex, several strategically located stop/start locations are needed to prevent the chassis facilities from becoming a bottleneck of their own, LaBar said.