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West Coast Terminals Evaluate Extended Gate Options

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The marine terminals at the Ports of Los Angeles and Long Beach held a workshop on Oct. 20 with industry stakeholders to evaluate potential alternatives to the current extended gates model used at the ports under the OffPeak Program.

The 13 container terminals that comprise the West Coast MTO Agreement (WCMTOA) met in San Pedro with more than 70 leaders representing importers, exporters, trucking companies, logistics providers, government representatives and other stakeholders. The OffPeak program is managed by PierPass Inc., a not-for-profit company formed by WCMTOA to coordinate multi-terminal programs addressing congestion, air quality and security.

PierPass launched the OffPeak program in 2005 to reduce severe cargo-related congestion on local streets and highways around the Los Angeles and Long Beach ports. Using a congestion pricing model, PierPass charges a Traffic Mitigation Fee (TMF) on weekday daytime cargo moves to incentivize cargo owners to use the OffPeak shifts. The TMF also helps pay for the labor and other costs of operating the OffPeak shifts.

Since 2005, OffPeak has taken more than 35 million truck trips out of daytime Southern California traffic and diverted them to less congested nights and weekends.

Various interested parties have proposed alternate models for the extended gates. These include variable pricing, under which the TMF would be higher in times of high gate activity and lower in times of low gate activity; a lower flat fee applying both to day and night moves, with appointment systems to help regulate traffic flow; and port-wide peel-off, in which trucks would operate like taxis in an airport queue and each pick up the next available container.

Working with PierPass staff, the PierPass Advisory Committee has been tasked with compiling the feedback received at the workshop and producing a report, with possible recommendations, on proposed changes to the model. PierPass will distribute the final draft of the Extended Gates Report and Recommendations in mid-April. A follow-up to the Extended Gates Workshop has been scheduled for early May.

“The stakeholders who gathered yesterday share the goals of moving cargo efficiently and productively through the ports while minimizing impacts on neighboring communities,” said PierPass President John Cushing. “We welcome stakeholder input on potential alternatives to meeting the needs of operating and funding extended gates and distributing truck traffic between day and night to minimize road congestion.”

The West Coast MTO Agreement is filed with the Federal Maritime Commission, and comprises the 13 marine terminal operators serving the Los Angeles and Long Beach ports.

Terminals in Ports of Los Angeles and Long Beach Move Start of Chassis Rule to September 1

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LONG BEACH, Calif., Aug. 1, 2016 – The West Coast MTO Agreement (WCMTOA) has extended the implementation date of a new tariff rule for chassis services by one month until September 1. The rule applies to chassis owned by chassis leasing companies that receive services from WCMTOA’s marine terminal members at the Ports of Los Angeles and Long Beach.

The chassis system in the United States has been in flux for several years as shipping lines have moved away from providing the chassis (the truck trailer onto which containers are mounted) as part of their services. Since 2014, users in Los Angeles-Long Beach have arranged chassis directly with the leasing companies.

However, the terminals haven’t been compensated by the leasing companies for basic services provided such as storage space, stacking and unstacking the chassis, and electronic data interchange (which tells the chassis lessors who is using their chassis). Since the chassis leasing companies formed a “pool of pools” in early 2015, the terminals have been working with the leasing companies to address the compensation and services issues.

The new Rule 15 of WCMTOA’s Marine Terminal Schedule No. 1 describes the “On-Terminal Chassis Services” provided and establishes the “Chassis Services Fee.” The rule provides for a $5 fee each time a chassis enters or leaves the terminal, to cover the cost of services. The fee will be collected by PierPass on chassis with loaded or empty containers mounted, but not on bare chassis. MTO Schedule No. 1 is available at http://goo.gl/QihQ1u.

No fees will be charged for chassis that are owned directly by cargo owners or trucking companies, as these owners don’t require the services provided to leasing companies. Neither cargo owners or trucking companies need register their chassis under Rule 15.

Rule 15 was originally scheduled to take effect today, August 1. On Friday, PierPass informed the FMC that it was extending the start date to September 1, giving the leasing companies additional time to implement the change without impacting cargo flow in the ports.

The West Coast MTO Agreement is filed with the Federal Maritime Commission, and comprises the 13 marine terminal operators serving the Los Angeles and Long Beach ports.

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PierPass Terminals Embrace Appointment Systems at Ports of Los Angeles and Long Beach to Control Congestion

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LONG BEACH, Calif., August 27, 2015 – In the latest in a series of measures to combat congestion, PierPass Inc. today announced that 10 of its member container terminals have agreed on a coordinated initiative to establish appointment systems for trucks delivering containers to and from the terminals at the Ports of Los Angeles and Long Beach.

The terminals have adopted an appointment system action plan and committed to a set of common requirements. The five terminals that currently operate appointment systems have agreed to adopt these requirements, and five more terminals plan to introduce appointment systems in 2016 that will follow the same guidelines.

All the terminals have agreed that their individual appointment systems will share these rules in common:

  1. Appointments will be mandatory at all participating terminals. At times, appointments have been treated as optional, which has reduced the intended benefit of smoothing out truck traffic flow.
  2. The appointment systems will apply to import containers at all terminals. Appointments for exports are being evaluated as a potential future requirement.
  3. All individual terminal appointment systems will be accessible via links from PierPass’ websites.

“The increasing number of containers unloaded by larger new ships has put the traditional random-access system – where any truck can arrive at any time to pick up any container – under strain,” said John Cushing, president of PierPass, a not-for-profit company created by marine terminal operators at the Ports of Los Angeles and Long Beach to address multi-terminal issues such as congestion, air quality and security. “Appointment systems are part of the growing set of tools terminals are embracing to fight congestion and reduce turn times, alongside innovations including free flow and the OffPeak program of night and Saturday truck gates.”

“Since we updated our appointment system in 2014, we have seen a marked decline in queuing at our gates and better turn times for our truckers,” said Mark Wheeler, vice president and general manager at West Basin Container Terminal (WBCT) in Los Angeles.

For truck drivers, trucking companies and cargo owners, the appointment systems will add predictability to the supply chain. The variable queue lengths at different times of the day will be flattened out, which is expected to reduce the longer truck turn times. Appointment systems also allow terminals to group appointments for specific stacks of containers, reducing the time spent waiting for container-moving yard equipment to move between stacks.

“Coordinating pick-ups and deliveries with the trucking companies will increase productivity for the truckers and for our terminal operations,” said Sean Lindsay, chief operating officer of International Transportation Service (ITS) terminal in Long Beach. “Therefore, we will be implementing an appointment system in 2016 to achieve this.”

The following terminals currently have appointment systems:

1. APM Terminals (APMT)
2. Eagle Marine Services (EMS / GGS)
3. West Basin Container Terminal (WBCT)
4. Seaside Transportation Services (STS / Evergreen)
5. Total Terminals International (TTI)

Terminals planning to implement appointment systems in 2016:
1. Trapac
2. Long Beach Container Terminal (LBCT)
3. SSA Terminals (Long Beach) (Pier A)
4. International Transportation Service (ITS)
5. Pacific Maritime Services (PCT)

Eight Marine Terminal Operators Suspend One OffPeak Shift Amid Seasonal Slowdown

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Four more marine terminal operators at the Ports of Los Angeles and Long Beach announced they will suspend one PierPASS OffPeak shift per week starting in March due to the traditional seasonal decline in cargo volume. Other MTOs announced an OffPeak gate suspension in February. This makes a total of eight terminal operators that have cut back to four OffPeak shifts per week.

Terminal operators are taking steps to adapt to market conditions during the traditionally slow period of January to April. Adapting the number of OffPeak shifts to match fluctuations in cargo volume helps ensure the viability of the OffPeak program.

Anecdotal evidence indicates that vessel calls at one terminal operator are down by about 25 percent compared to earlier this year, while another terminal operator reported it received zero vessel calls during a one-week period in February.

Extra weekly shifts are funded by revenue generated from the Traffic Mitigation (TMF), a $50 per TEU fee charged on container moves during peak daytime hours. The drop in cargo volume translates into reduced collection of the TMF. In the fourth quarter of 2010, the actual cost of OffPeak gates was $95 per TEU – a $45 shortfall per TEU.

Since PierPASS was created in 2005, revenue from the TMF has never fully covered the added costs of operating five OffPeak shifts. The cost to operate OffPeak gates is relatively fixed, so a decrease in cargo volume translates into an increase in the OffPeak cost per TEU. Suspending one OffPeak shift per week due to reduced volume should produce measurable cost savings during this traditional slow period.

The rollout of this suspension starts March 12. An updated OffPeak schedule is available on the PierPASS website.

During this period, PierPASS and marine terminal operators will continue to monitor conditions and take steps to avoid congestion.

Four Marine Terminal Operators Suspend One OffPeak Shift per Week Amid Seasonal Slowdown

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Four marine terminal operators at the Ports of Los Angeles and Long Beach announced they will suspend one PierPASS OffPeak shift per week due to the traditional seasonal decline in cargo volume.

The rollout of this suspension starts February 12. An updated OffPeak schedule is available on the PierPASS website at https://www.pierpass.org/offpeak-information/offpeak-schedule-2/.

Terminal operators are taking steps to adapt to market conditions during the traditionally slow period of January to April.  Adapting the number of OffPeak shifts to match fluctuations in cargo volume helps ensure the viability of the OffPeak program. As cargo returns, the issue will be revisited, but Flex gates should not be impacted.

The drop in cargo volume translates into reduced collection of the Traffic Mitigation Fee (TMF) charged on cargo container moves during peak daytime hours. In addition to providing a financial incentive to move cargo during the OffPeak shifts, the TMF is intended to cover the cost of adding extra shifts per week.

Since its inception in 2005, revenue from TMF collection has not fully covered the added costs of operating the five OffPeak program shifts. The cost to operate OffPeak gates is relatively fixed, so a decrease in cargo volume translates into an increase in the OffPeak cost per TEU. Suspending one OffPeak shift per week due to reduced volume should produce measurable cost savings during this traditional slow period.

During this period, PierPASS and marine terminal operators will continue to monitor conditions and take steps to avoid congestion.

Port of Long Beach Reports Record Jump in Traffic

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The Port of Long Beach yesterday reported that 2010 container cargo volume at the port rose 23.6 percent over 2009, a record increase but still 14 percent below the port’s 2007 peak in container traffic.

Imports rose 23.4 percent over 2009 to 3.1 million TEUs, and exports were up 15.6 percent to 1.6 million TEUs. Including empties, Long Beach terminals handled 6.3 million TEUs for the year.

This is welcome news for Long Beach as it regained part of the 2.2 million TEUs it lost between 2007 and 2009 during the global trade recession – a drop of 30.7 percent. We have just been through a very challenging time, but things are clearly getting better in Southern California.

This news comes after the Port of Los Angeles reported last week that traffic surged 16 percent in 2010.

As we move into the traditionally slower post-holiday and pre-Chinese New Year period of the year,we will see expectedly lower cargo volumes in Long Beach and LA.

The marine terminal operators in Long Beach and LA continue to adjust their hours and staffing as market conditions change to combat congestion and ensure high efficiency levels throughout the year.

Stay tuned for more updates on business conditions at the ports.