Responding to a surge in volume and industry feedback, 11 of 13 terminals will have reinstated five gates per week by September 8. The fifth shift will be rolled out over the next several weeks. Click here to see the updated schedule.

When the terminal operators were forced to cut one OffPeak shift in 2009 due to a drop in cargo, they did so expecting they would add back the shift once volumes returned. Since the beginning of the year, we have seen cargo start to bounce back. In July, the ports of Los Angeles and Long Beach reported a 26.8 percent and 35.8 percent increase in volume, respectively, compared to the same month in 2009.

The terminal operators understand the industry’s need for five gates per week. PierPASS actively participates in industry discussions – through the working group formed by PierPASS to address congestion issues, our PierPASS Advisory Committee, and meetings with associations, harbor commissioners, port authorities, and more – to listen to feedback from all our stakeholders and gather a variety of perspectives.

We also heard – and responded to – feedback on adding back shifts that start earlier and keeping the gates open at lunch. In fact, 85 percent of terminals now work the gates through the lunch hour and start the night shift at 5 p.m. to keep cargo and traffic flowing. Since the beginning of the year, terminal operators have added 37 percent more labor.

Terminal operators have also committed to adding an extra Friday OffPeak shift when a Thursday OffPeak gate if closed for ILWU Stop Work meetings. So far this year, there have been four Stop Work meetings.

See the video on the PierPASS YouTube channel for more information on proactive measures terminal operators have taken to reduce traffic congestion and increase the efficient flow of cargo.

The latest transaction data from marine terminal operators (MTOs) at the Port of Los Angeles and Port of Long Beach shows that nearly half of trucks conducted at least four transactions (pickups or deliveries of containers) per day in late July, while almost two-thirds of trucks made three or more transactions per day.

In an effort to achieve more efficient cargo movement, PierPASS has developed a video addressing gate congestion and discussing potential solutions. The video is available on the PierPASS YouTube channel.

“The analysis of transaction data shows that the ports are vastly underutilized despite increased cargo volume and truck traffic,” said Bruce Wargo, president and CEO of PierPASS. “PierPASS and the MTOs are working together to improve the efficiency of cargo movement through the ports, ease the challenges of increased cargo volume and help the industry take advantage of unused capacity to minimize congestion.”

The analysis, which includes transaction data from July 26, 2010 to August 1, 2010, shows that:
• 5,326 trucks (63.4 percent) made at least 15 transactions, or about three per day.
• Of that group, 3,849 trucks (45.8 percent) conducted at least 20 terminal transactions, or about four per day.
• 48 trucks managed to make more than 50 pickups or deliveries in that week, or about 10 per day.

The analysis includes transaction data from the 13 container terminals serving the San Pedro Bay ports.

Number of Transactions per Week

[youtube=http://www.youtube.com/watch?v=9vM1xdwy39U]

Following a plunge in cargo volumes in 2008 and 2009, volumes have strongly rebounded at the two ports, leading to an increase in truck traffic. In response to this surge, the marine terminal operators have reinstated labor, gates and shifts cut during the recession. Terminal operators have increased labor levels by 37 percent since January 2010.

Lines outside the terminals are long primarily around 6 p.m. During much of the day and night shifts, there is little or no congestion at the terminals. Truckers can avoid lines by arriving from 9 a.m. to noon, 2:00 p.m. to 5:00 p.m. and 11 p.m. to 3 a.m.

We’ve been watching gate capacity and developed this video to help explain the situation and urge motor carriers to take advantage of unused capacity to minimize congestion.

In response to the recent surge in truck volumes, some in the industry have expressed concern about wait times at the terminals gates. Marine terminal operators are diligently working with industry stakeholders to identify solutions. It is imperative that the trucking industry contribute by taking advantage of under-congested and under-utilized times at the gates. By spreading out volume and utilizing our existing infrastructure, trucking companies will improve the efficiency of their businesses.

Stay tuned to the PierPASS YouTube channel for more information.

Last week we had the first meeting of the working group and it was a huge success. In fact, the group turned out to be more of a think tank than a working group, bringing together the best and brightest ideas in the industry to address the issue of congestion. We agreed that all industry players need to contribute to the solution, no one entity can resolve the issues alone.

Terminal operators acknowledged and understood the challenges faced by the motor carriers, importers, retailers, etc. as a result of the cutbacks they had to make in response to the economic downturn. But we’re adding back many of those services and looking at other measures, such as appointment systems, to help ease congestion and improve conditions so drivers can make as many turns as possible in a day.

While many MTOs have already returned to five OffPeak gates per week, we’re aiming to have five OffPeak gates per week across all marine terminal gates. We’ve also added back flex hours and the noon hour relief, and we’ve increased labor levels by 37 percent since the beginning of the year.

Over the next month, MTOs will consider the concerns of the stakeholders and further discuss with the working group additional measures that may help reduce congestion and improve turn times.

As cargo volumes have rebounded from the recession, some have expressed concern that congestion is growing at the Ports of Los Angeles and Long Beach. As we move to evaluate and address these concerns, it is important to recognize the situation here is just one facet in a global readjustment. Consider these headlines from the past two weeks alone:

• Penang Port Needs a Month to Solve Woes (Malaysia Star, July 28, 2010)
• Retailers Pay More to Get Cargo (No Guarantee) (New York Times, July 26, 2010)
• Haiti’s Port System Chokes Supply Lines and Commerce (Tampabay.com, July 24, 2010)
• Nigeria: Reps, Stakeholders Meet on Apapa Port Congestion (AllAfrica.com, July 23, 2010)
• Indian Port Congestion Causes Severe Delays (Journal of Commerce, July 23, 2010)
• Trade at Risk as Urban Sprawl Hits Ports (The Australian, July 22, 2010)
• Congestion Returns to European Ports (Journal of Commerce, July 20, 2010)
• Port Congestion Threatens Brazilian Sugar Shipments (AgraNet, July 19, 2010)

Cargo owners, shipping lines, terminal operators, trucking companies – pretty much everyone in the goods movement industry – ramped down when the recession hit. Now that we’re seeing import and export demand start to improve, everyone is trying to ramp back up as quickly as possible. While some ports are facing congestion issues as a result of bad weather, lack of space or political holdups, the fact is that we’re all doing our best to move cargo as quickly as possible.

The terminal operators in Los Angeles and Long Beach are no exception. Last year, terminal operators had to take measures to manage costs – as has everyone in this economic climate. Last year we eliminated one OffPeak gate. This was a difficult decision but it was necessary and we made it knowing that when cargo volumes recover, we could and would add back that additional gate.

Programs like PierPass cannot be switched on and off as volume dictates, but we can be flexible. There is a substantial investment in establishing such a program, and it’s important that we are committed to maintaining the program as long as it provides value to the trade.

The return of cargo volumes and maximizing port capacity are issues the industry is facing in all regions of the world, not just the San Pedro Bay ports. I look forward to seeing how other ports deal with issues of congestion and turn times and what we can learn from them.

At the POLB Harbor Commission hearing I attended last week, we talked about forming a working group to hear feedback and help identify potential solutions to the turn time issues we’ve been hearing more about over the past several months. I’ve been asked to head this group which will consist of about 30 members representing importer and exporter interests, the trucking community, port authorities and MTOs. Our first meeting is July 29 in Long Beach. I am honored to lead this group and look forward to meeting with stakeholders to hear their feedback and perspectives. I will keep you apprised of the group’s activities and findings.

Yesterday I spoke at the Port of Long Beach Harbor Commission hearing about the proactive measures the terminal operators are taking to address congestion at the gates. There were a lot of trucking interests represented who had a lot to say about turn times and terminal operations.

Fred Johring, president of Harbor Trucking Association , noted: “The driver base and how the drivers work in the harbor has evolved… What we’ve got now, whether they’re employees or owner operators, they’re driving new trucks. They’re driving a much more expensive asset than they’ve ever had in their hands before. So whether they’re employees or owner operators, they want to work the maximum time they can… What I’ve seen with my fleet, is at least 50 percent of the driver’s time in his work day is spent waiting for loads in the harbor. While I heard the turn time inside the terminal is 45 minutes, the reality is these guys are waiting more than half the time of their work day.”

Tom Villardi, owner of JMKC Express, said: “The BCO controls a lot of what’s happening. If the BCO would allow the container to be picked up 24 hours after the container actually clears customs and is ready for pickup, then the appointment system would be simplistic. You have 24 hours to make the appointment, the trucker would know when the appointment is, the terminal would know when the cargo needs to be discharged and ready to go. There are a lot of systems we could put into play that could make this more efficient.”

I know truckers spent a lot of money to upgrade to clean trucks – about $100,00 for each new clean truck – and there’s a lot of pressure to increase turns to help pay for it. We all want the same thing. Efficient cargo movement is good for everyone in the industry, and that’s why we’re taking steps to keep the cargo flowing. MTOs have been adding back the noon hour relief and flex gates to process trucks at the gates as quickly as possible. Over the past several years, we’ve introduced a number of solutions (such as OffPeak gates and RFID tags) to keep trucks – and cargo – moving as quickly as possible.

At the POLB meeting, the suggestion came up to form a working group to gather feedback from the industry and to help identify potential solutions. I think that’s a great idea and look forward to hearing ideas from a variety of industry participants.

While economists debate whether the economy is recovering, we’re seeing signs of improvement at the ports. Cargo volume at the Port of Los Angeles in May 2010 was up nearly 20 percent compared to the same period last year. We remain cautiously optimistic about when we’ll see a full recovery, but it’s certainly an improvement from the 32 percent plunge we saw in the fourth quarter of 2008 from the same period in 2007.

The Great Recession of 2008 and 2009 led to deep losses for the MTOs (and all of us), forcing them to cut costs by reducing the number of OffPeak gates and cutting back on noon relief and flex gates. This has contributed in part to truck congestion at the gates (see “Trucks Waiting Longer at Calif. Ports as Cargo Rise Hits Leaner Terminals” in Transport Topics).

MTOs have been watching cargo volumes closely, and now that we’re seeing an uptick in volume, they are taking steps to reinstate some of the services they had to cut last year. Seven of 13 terminal operators have returned to five OffPeak shifts, 10 reinstated the noon hour relief (working through lunch), and four have added back flex gates (starting shifts an hour earlier).

The MTOs are committed to the efficient flow of cargo through the ports. In fact, the San Pedro Bay ports offer the most shifts of any port in the nation, with 58 gates. As the economy and cargo volumes pick up, we will continue to assess how to improve cargo flow and reduce truck congestion.

A couple days ago we held a lunch in Long Beach with representatives from the trucking industry to gather feedback on the design and implementation of the upcoming appointment system. We received a lot of really candid comments, suggestions and questions from the trucking industry that will help us as we move forward.

Prior to the meeting, we conducted a survey to gauge industry sentiment and hear valuable feedback to help us make sure the system works for truckers and meets industry needs. The survey was distributed to about 500 trucking companies, and we had a response rate of 25 percent.

Overall, the survey results showed that truckers are very concerned about the perceived increased costs an appointment system would add to their businesses and the issue of lengthy turn times at the terminals: 96 percent of respondents have experienced the impact of long truck queues outside the gates at certain times of the day and evening and 24 percent of respondents indicated they have found appointments to be helpful. Below is an excerpt from the survey responses.

I am proud to report that PierPass has achieved its 15th million OffPeak truck trip. That’s 15 million truck trips that took place in the nighttime and Saturday shifts we added in 2005, rather than adding to daytime highway and port congestion in Los Angeles and Long Beach. The success of the OffPeak program would not have been possible without support and feedback from the industry and community along the way.

It’s hard to imagine that only five years ago the OffPeak program didn’t exist. Today, we know it would be very difficult to return to only daytime gates. With 55 percent of cargo movements taking place during offpeak hours, the OffPeak program has proven to be a core element of port operations. But it’s important to remember why PierPass was created.

Prior to 2005, traffic congestion around the ports was out of control and the local community and elected officials demanded that we do something about it. The state proposed a solution to the problem – one that would generate no revenue to pay for the additional gates and would leave it up to decision makers in Sacramento to determine how to spend the fees. The OffPeak program, by contrast, is an industry-driven solution that provides both a funding mechanism for doubling the hours of port operations and a financial incentive to move cargo during the new shifts.

We have come a long way in five years. In 2005, many critics thought we couldn’t get the OffPeak program off the ground. Now, PierPass has transformed the goods movement industry. In a typical week, OffPeak shifts handle 63,000 truck trips. In addition to reduced truck traffic on local highways, the OffPeak program provides a variety of benefits: spreading traffic across more hours, reducing the uncertainty of delivery times, and improving turn times for trucks and drivers.

Most importantly though is that in a time of continued economic uncertainty, the OffPeak program makes better use of valuable port assets without building additional infrastructure. By doubling the number of hours in a working day and allowing cargo to move faster at night on less crowded roads, truck owners can deliver more loads and make better use of their investments in new clean trucks.