After stakeholder input and the completion of an independent study, PierPass’s OffPeak Program to regulate the movement of trucks into and out of terminals at the San Pedro Bay Ports is set to undergo changes meant to address congestion issues and improve goods movement efficiency.
The 12 terminal operators at the ports of Long Beach and Los Angeles, which oversee the OffPeak Program operated by the nonprofit PierPass, voted in mid-April to alter the current program. Currently, a traffic mitigation fee is charged on weekday daytime visits by truckers dropping off or picking up loaded containers at the terminals. The fee incentivizes truckers to arrive during off-peak hours, at night or on Saturdays, to reduce congestion and the emissions that idling trucks cause during peak times.
Under the current OffPeak Program operated by the nonprofit PierPass, trucks are incentivized to visit port terminals during night time or weekend shifts, when a fee is not charged. As a result, truckers often queue outside of terminals before the off-peak shifts, causing congestion. PierPass is changing to a flat-fee system across shifts to address the issue. (Port of Long Beach photograph)
Through the West Coast Marine Terminal Operators Agreement (WCMTOA) sanctioned by the Federal Maritime Commission, the 12 terminals at the San Pedro Bay ports voted to institute a flat fee for all terminal shifts, rather than charging a traffic mitigation fee for peak hours. “The traffic mitigation fee is currently $72.09 on a 20-foot container and $144.18 on a 40 [-foot container] and other sizes,” John Cushing, president and CEO of PierPass, said. “Payment on those containers is currently done via the PierPass website. It will be the same payment process. It’s just going to be at a lower rate: $31.52 per 20 [-foot container] and $63.04 on 40 [ foot containers] and other sized containers.”
The new fees were determined by examining how much fee revenue was collected in 2017 and for how many containers, according to Cushing. “Basically, it’s revenue neutral going forward.”
The WCMTOA members also voted to adopt appointment systems to schedule truck visits. According to Cushing, nine of the 12 terminals already use appointment systems, and the remaining three have now agreed to implement their own. While the ports’ recently adopted update to the Clean Air Action Plan calls for a universal appointment system across the ports, for now the terminals are each operating their systems independently, he explained.
The OffPeak Program has, by many accounts, been successful in reducing congestion and emissions; however, it has created some inefficiencies that the new arrangement is meant to address. “There were some inherent inefficiencies associated with the old program,” Anthony Otto, president of Orient Overseas Carrier Line-owned Long Beach Container Terminal at the Port of Long Beach, told the Business Journal.
The primary issue is that trucks queue outside of terminal gates between peak and off-peak shifts, from about 3 to 6 p.m., to wait to enter during off-peak hours and avoid the traffic mitigation fee, Otto explained. By instituting a flat fee, this problem should be resolved.
The terminals will leverage their appointment systems to ensure that there is an equal flow of traffic between day and night shifts, Otto said. “The appointments, which have become much more sophisticated in our industry, will allow us to regulate that flow.”
Cushing pointed out that having an appointment system would facilitate more dual transactions by truckers. In a dual transaction, a trucker would, for example, bring an empty container to a terminal and leave with a loaded container for delivery. Currently, some truckers bring empty containers back during the daytime because those loads are not subject to the traffic mitigation fee. But they then wait until the off-peak shift to come back for a loaded container in order to avoid the fee, he explained. Because there is now a flat fee for both shifts, truckers are more likely to visit a terminal once for both transactions.
Otto has been an advocate for making changes to the program and said he has been pleased with the process. PierPass conducted stakeholder meetings for about a year and a half and commissioned an independent study to come up with recommendations to make the OffPeak Program more efficient.
“The trucking industry embraces it. The ports are embracing it. The terminals obviously are, because it’s going to make our ports even more efficient than they had been,” Otto said.
Mario Cordero, executive director of the Port of Long Beach, praised PierPass for being open to changing the status quo. However, he reserved an opinion on the changes to the program until a full plan has been released. “Whatever the direction they are going to go in terms of how specifically they implement this new version of PierPass, the ultimate question for us that needs to be answered is: is the service going to be improved?” he said.
Cordero believes that creating extended gate hours for terminals would result in reduced truck turn times – the time it takes for a truck to pick up and deliver cargo and return for another load. This concept is not a part of the OffPeak Program changes. “In my view, if that objective is reached and we have extended gate hours that are predictable, reliable and efficient, then this gateway and this port will continue to be the port of choice,” he said.
In an official announcement sent out by PierPass, Gene Seroka, executive director of the Port of Los Angeles, said that he was pleased with the organization for taking a step forward in improving efficiencies at the ports.
The trucking community also gave positive feedback. “The California Trucking Association (CTA) appreciates the proposal put forth by PierPass regarding its restructuring of the TMF [traffic mitigation fee],” Alex Cherin, executive director of the CTA Intermodal Conference, stated. “This is the culmination of many collaborative discussions between the marine terminal operators and trucking communities over the last few years, and we look forward to supporting these efforts.” Weston LaBar, CEO of the Harbor Trucking Association, called the changes a “giant step in the right direction.”
Cushing said the changes should be implemented in August, pending review by the Federal Maritime Commission.