Solving the US congestion conundrum

Los Angeles' PierPass is still the most comprehensive gate management programme on the US West Coast. Credit: Edsel Little
Los Angeles' PierPass is still the most comprehensive gate management programme on the US West Coast. Credit: Edsel Little
Oakland International Container Terminal charges a per container fee in its busiest times
Oakland International Container Terminal charges a per container fee in its busiest times
Global Container Terminals Bayonne is the only terminal  on the US East Coast that offers truck appointments. Credit: Global Container Terminals Bayonne
Global Container Terminals Bayonne is the only terminal on the US East Coast that offers truck appointments. Credit: Global Container Terminals Bayonne
Industry Database

Different approaches to tackling backlogs are making headway, but there is still no perfect solution, finds Martin Rushmere

Amid increasing anxiety about container delivery and collection delays at US ports, proposals for imposing fees to get faster access to ports are meeting sceptical, and sometimes cynical, reactions.

And in a poker-like scenario, terminal operators and port authorities are waiting to see what others do before deciding whether to play. The options on the table are the establishment of fixed appointments, and/or fees merely to get into the terminals.

Los Angeles/Long Beach still have the most comprehensive system in the form of PierPass, which charges 72.09 per teu (double for a feu) for trucks calling at the 12 terminals in the ports during the busiest times (0300 hrs to 1800 hrs weekdays).

Undoubtedly this has eased congestion on the notoriously clogged freeways of Southern California, with 58% of the 30,000 truck moves each 24 hours occurring during off-peak hours. Nine of the 12 terminals also offer appointments, which further smooths the traffic flows. PierPass says 40 million truck trips have been removed from peak hours since the system was introduced in 2005.

Return of delays

But congestion is again very much back in play, with the record volumes of containers being moved by the two ports. So much so that the terminal operators commissioned a study by two consulting groups, Tioga and World Class Logistics.

The conclusion was to introduce the option of a flat fee ($30 has been suggested) for all trucks, regardless of when they are at the port, combined with appointments for all terminals or a “peel-off” system whereby trucks become almost like taxis at an airport, picking up the next container coming off a vessel.

The response from the haulers, cargo owners and terminal operators has been heavily in favour of the appointment system/flat fee and PierPass is set to make its own recommendation in the next few weeks.

Oakland International Container Terminal (operated by SSA) is the only other terminal on the US West Coast charging a fee, $30 per container, for truck moves during the busiest hours.

Seattle and Tacoma extend port gate hours during peak season from August, with the port authority providing $2m to help offset increased costs. The port authority says gate hours increased by 70 to 90 hours per week in the 2017 season, accounting for about 8%-10% of the total gate volumes.

Dan Smith, co-author of the PierPass report and senior partner of Tioga, notes that a flat fee will mean bigger fleet operators will pay more and smaller companies less. “But it’s not a straight difference between the traffic mitigation fee and those truckers working at off-peak hours. We found that there are hidden costs when calling at the ports in the non-busy periods – for example, truck operators working the off-peak hours often have to pay parking fees at commercial premises overnight, as they can only deliver their cargo during normal office hours.”

Wide net

John Cushing, chief executive of PierPass, says discussions are being held with the three terminals that currently don’t require appointments (Pier A, Long Beach – SSA Marine/TIL; Pacific Container Terminal – SSA Marine; and C60 – SSA Marine/Matson) to bring them into the fold.

A spokesman for Oakland says the OICT accounts for 60% of traffic at the port, with 6,000 container vehicle moves a day, making it the busiest terminal in the country after Savannah. “There is no doubt that the night gates have worked extremely well and are welcomed by the industry.” The Trapac terminal has begun trial operations with night gates.

Weston LaBar, chief executive of the Harbour Trucking Association (the coalition representing haulers at the two Southern California ports), says the association is “supportive in theory” of the flat fee/appointment proposal. “The devil is in the details. We don’t know what the fee will be – the lower the better. There is still a need to control the flow between 1500 hrs and 1900 hrs. The appointment system needs to be more dynamic and make appointments before the container leaves the vessel. The Yusen terminal already does it.”

Mr LaBar says the biggest weakness affecting the terminals at the two ports is that they do not share electronic information. “Technology can solve this.”

Oakland agrees and is looking more to electronic means to improve traffic and cargo flows. The port is developing a common platform for all cargo owners and haulers to get personalised cargo status updates, check vessel schedules, pay cargo handling fees and make appointments for collecting containers.

Concerns abound

On the US East Coast, worsening congestion and delays over the last five years are beginning to cause problems for administrators and local politicians. Surprisingly, the only terminal that offers appointments is Global Container Terminals Bayonne (GCT Bayonne) at New York/New Jersey.

GCT Bayonne reports that the newly implemented system has improved truck turn times by more than 40% down to under an hour, allowing about 300 transactions per hour. Today, more than 50% of all daily gate visits are executed at the terminal under the new reservation system.

The port authority said GCT Bayonne now handles 1,700 appointments a day, and the terminal said that turn times through the new system are 45% faster than those outside the reservation window.

“Reservation windows run for a full hour with a half hour grace period on either end,” says the port authority. “Since truck traffic will be metered into the terminal, the system is expected to accommodate single moves in 45 minutes and a double move within one hour. Reservations can be cancelled at any time, and modifications can only be made during the reservations window, which is currently Monday through Friday 0600 hrs-1800 hrs. Trucks without appointments can now enter between 1200 hrs and 1600 hrs.

Ports America and its partner TIL (the terminal arm of MSC) have taken a different tack with their Flex Services fee at Port Newark Container Terminal (PNCT). Fifty slots a day at $95.50 per container are open to those who want to be the first to pick up their cargo when the terminal opens at 0600 hrs. The terminal says the system will be expanded for reefers to be collected after the 1630 hrs cut-off, for $80.

Industry executives have for some time been making their anxieties known privately about the congestion problems on the US East Coast where they claim that the West Coast’s successful PierPass system cannot be copied because the East Coast trucking industry, local politics and the dockworker union all differ vastly from those in California. It seems there is no one-size-fits-all solution in sight for clogged up US terminals.



LAGGING BEHIND TRAFFIC VOLUMES

Jonathan Gold, vice-president of the National Retail Federation, the voice of the largest retailers and chain stores in the US, claims that the US West Coast’s PierPass and the US East Coast have not kept pace with growing volumes of traffic. “An improvement in the system is to be welcomed, but it must include all stakeholders throughout the industry and supply chain – there are concerns that only some of them will be involved.”

These concerns centre mostly on the smaller hauling companies and one-person operations. This is especially acute when appointments are being made – big operations can delegate staff to jump in and hammer away at computer keyboards the moment appointment slots become available. Smaller outfits are occupied in collecting loads and driving and do not have the luxury of taking time to make favourable appointments.

Adding to the mix and worries over congestion is the Federal Maritime Commission, which is probing demurrage and detention charges at US terminals. Trucking companies and cargo owners have been complaining that terminals are tightening the penalties and cut-off times for cargo to be collected.

Some analysts are unsurprised by the terminals’ attitudes. “They are needing to get more money, what with the massive costs of cranes and loaders today,” said one, speaking privately. “They can’t get the money from the ocean carriers, because they are strapped, and so are looking at the landside operators.”

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