The terminal group meets with FMC, shipper groups and explains efforts to extend terminal hours.
After meeting with members of the Federal Maritime Commission and several shipper groups last week, PierPass does not plan to lift its traffic mitigation fee on cargo moving through the Port of Los Angeles and Port of Long Beach during the daytime hours, but the group detailed how its terminal members are keeping their truck gates open many more hours in an effort to ease congestion at the two ports.
PierPass collects a $66.50 fee from truckers shippers who have truckers moving full containers of cargo on and off terminals during the day. The fee encourages truckers to pick up and drop off cargo after 6 p.m., when the fee is not charged. The fee is used to fund the operation of terminals at night and on the weekend.
Several shipper groups and members of the Federal Maritime Commission have asked PierPass, which was set up by terminal operators in the two ports, to waive or reduce the fee because of ongoing congestion at the ports. But PierPass has expressed concerns that if the terminal traffic mitigation fee was suspended “previous congestion problems would be reintroduced and would exacerbate the current congestion caused by a range of factors including shortages of available chassis.”
The terminal traffic mitigation fee (empty containers and containers moving in and out of the port on intermodal rail are exempt) is collected if trucks enter terminals between 3 a.m. and 6 p.m. PierPass says its members do not make a profit from the fee, which it says paid for only a portion of the $98 per TEU it cost to run night operations in 2013. And this year, PierPass Chairman Bruce Wargo and President John Cushing said that marine terminal operators have been spending $3 million per week on additional and unbudgeted costs since Sept. 1 to manage congestion.
The money has been spent on adding additional shifts of workers to keep truck gates open on more nights and weekends; pay longshoremen to work overtime and through lunch and breaks; and pay truckers to move containers between terminals to load containers onto “on-dock” trains.
PierPass said that in September, the terminals operated 73 additional “gates” — shifts to keep gates open — or 30-percent more than scheduled. In October, 86 additional “gates” were scheduled, a 33-percent increase.
Cushing and Wargo briefed all five members of the FMC and their staff on what they are doing to address congestion in the two ports. They also met with representatives from the National Retail Federation, the National Industrial Transportation League, the Waterfront Coalition and the Agriculture Transportation Coalition.
Cushing called the meetings constructive and productive. PierPass said it discussed initiatives to address chassis availability and its Free-Flow program, which prepositions large blocks of containers to enable quicker turn times for trucks picking up containers headed for a common destination.
Mario Cordero, the chairman of the FMC, said he told PierPass he was “disappointed that, in the view of many stakeholders — and it is certainly my view — PierPass did not step up to plate during this congestion period, specifically with regard to the declaring of a moratorium or temporary suspension of the fee.”
He continued, “Obviously they have their arguments, but suffice it to say, it was made clear they have to look at what the next steps are to avoid this sort of scenario. I’m talking congestion and all that is involved, including congestion itself in terms of turn time, and how it affects the truckers, and the cost, and how it affects the shippers.”
Cordero said it would have been interesting to see how the market would have reacted if the fee was suspended, saying he was not certain “everyone is going to run to the day gate — when we talk about the bigger shippers, the bottom line is how long is it going to take to get to the shelf. If your cargo is going to get the shelf quicker using the night gate, then you are going to use the nice gate.”
But he added, “For certain, you would have reduced the cost” to shippers had the fee been waived.
Cordero said, however, it was clear to him that “PierPass understands that we cannot have this kind of crisis again, and whether it is PierPass or other stakeholders, they have to sit at the table and either have a new model or tweak the old model to address these issues. I think they understand that.”
Cordero said additional hours could still be extended.
“They have received the message loud and clear, and not just from the FMC, but from all the stakeholders,” he said. “It is a critical issue, whether you are and importer or exporter, no matter what commodity you are involved in. More particularly, agriculture and the recycling industry really take a hit anytime there is a fee.”
However, the PierPass fee is smaller than the congestion fees — in some cases amounting to $1,000 per 40-foot containers — that some container shipping companies had announced they would impose on shippers moving cargo through West Coast ports. These fees have recently been put on hold by the carriers.
Correction: An earlier version of the headline incorrectly referred to a “congestion mitigation fee.” It is a traffic mitigation fee. Also, the fee is collected from cargo owners, not truckers.
