Industry groups said they are willing to work with the port to speed cargo through POLB, but expressed concern about how the plan might affect shippers, who want to pick up containers faster but say getting chassis and trucking capacity can be difficult.
The Port of Long Beach says that in order to increase velocity of cargo moving out of container terminals, it will consider reducing the amount of time import containers can be stored on docks without charge.
Leaders of various industry groups said they were willing to work with the port, but some also expressed concern about how the plan might affect shippers.
Since 2005, the length of time containers can stay on the dock, called “free time,” has been four days, the port said. Beyond that, terminals are charged storage fees.
“With larger vessels calling on the port regularly, there are more containers at terminals, inhibiting the ability of workers to deliver containers quickly and efficiently,” the Port of Long Beach said in a statement explaining its decision to consider reducing free time.
Port officials are proposing changing free time to six shifts, the equivalent of as few as three days, to encourage terminals to more consistently operate at night, moving imports off the docks faster.
“When containers stack up in terminals, it leads to extra handling that makes the process slower for longshore workers, the shippers that depend on them, truckers who move the goods, and ultimately the consumer,” said Port of Long Beach CEO Jon Slangerup. “This approach will keep the system more fluid and help avoid congestion.”
The port said its staff “will work with all stakeholders to develop a final plan that will be proposed to the Board of Harbor Commissioners for consideration.”
“Truckers have told us their containers are not always accessible because of fewer evening shifts, and terminal operators want to clear space in their yards while giving their customers enough time to get their cargo,” said Port of Long Beach Chief Commercial Officer Dr. Noel Hacegaba. “Our idea, ‘flexible free time,’ is an innovative use of the tools we have to balance those needs.”
Some transportation industry advocates disagree with the idea that reducing free time is a viable method for curbing port congestion.
“The problem is not the truckers. The problem is not the beneficial cargo owners using the terminal yards for free storage. The problem is that the terminal operators have not been able to efficiently handle the land side of their operations as well as they do the water side for their carriers. Just look at the lines of trucks outside the terminal gates,” said Don Pisano, chairman of the Ocean Transportation Committee at the National Industrial Transportation League. “It boggles the mind that anyone seriously suggest that the solution to the problem is to reduce free-time and penalize the shippers or their draymen for the terminals own inability to service them.”
Bruce Carlton, the president and CEO of the NIT League, noted, however, the Long Beach plan is “still a proposal under consideration, not a ‘done deal.’ The justification seems to be to get more night gates and night moves; if all parts of the system are working, that might be a very good idea. But if the truckers, railroads and shippers are not tuned into the terminals’ night gate system, it’s like throwing a party to which no one shows up. So all the pieces have to fit together.”
In a press release issued Monday, PierPass said its officers and terminal operators met last week with the Federal Maritime Commission chairman, commissioners and staff to review how conditions at the marine terminals in the Ports of Los Angeles and Long Beach “have rebounded strongly since the congestion crisis a year ago.” PierPass is a company created by the marine terminal operators in Long Beach and Los Angeles to address issues surrounding port congestion, pollution and security.
“The 13 container terminals continue to provide extensive availability of service to cargo owners moving their containers through the two adjacent ports. The terminals provided an average of 82 hours per week of truck gates in August, 84 hours per week in September, and 82 hours per week in October,” PierPass said. “These hours of service include daytime gates Monday through Friday; four to five OffPeak gates on nights and Saturdays; flex gates, where terminals hire extra labor to open before the start of a regular shift or remain open during contractually-mandated meal breaks; and ad-hoc gates, where terminals open up for an extra night or weekend to accommodate customer needs.
“The time it takes for terminals to retrieve and load import containers onto trucks or receive export containers from trucks is down sharply from its peak a year ago,” added PierPass. “Cargo is moving through the Ports of Los Angeles and Long Beach at velocities not seen since the first half of 2014, before the congestion experienced during the second half of 2014.
“For trucks picking up or dropping off containers at port terminals, in-terminal turn time in October averaged 48.3 minutes on OffPeak shifts, the lowest it has been since August 2014. Daytime interminal turn time in October averaged 46.3 minutes, the second-lowest it has been since June 2014. That is a significant drop from late 2014 through early 2015, when daytime and OffPeak turn times exceeded 60 minutes in some months,” it said.
“We look forward to working with the Port of Long Beach to understand how changing free time will alleviate the congestion facing the port,” Jon Gold, president of the National Retail Federation, said of the proposal. “Our members want to get their containers off the port as soon as possible, but are often facing delays because of issues beyond their control.
“We need to make sure the cargo owners are not penalized because the ports cannot move the containers as quickly as they need to if free time is reduced,” said Gold. “It is important that we continue to evaluate the causes of congestion and address those issues through collaboration and cooperation.”
Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association, said his group has reached out to the port and will meet with officials in coming weeks “to share our concerns about this plan. We understand that they are trying to increase the throughput of the port, but we think this is a program that doesn’t take into account the other factors that are causing cargo to be on the terminal longer.”
Those factors include chassis and drayage capacity, trucker hours of service regulations and terminal efficiencies, according to Gold, who said he has written to Hacegaba requesting a meeting on behalf of the association.
“Although it is possible that there are BCOs that are using the terminal for warehouse space, most of our customers are trying to get their cargo more quickly off the table but are unable to because of the drayage capacity available to do so,” he added.
Gold said shippers picking up cargo on the last free day are more likely to be doing so not because they want to store containers on the terminals but because there is no other time get it sooner.
“When drayage operators have to chose between their biggest customers and smaller customers, their biggest customers are always coming first,” he explained. “The medium to small importers are the ones to suffer because there are only so many trucks that can pull and so many appointments that are available. There are commonly days that people do not get their cargo because there are not enough trucks or hours in the day to get them out.”
PierPass said its members also discussed the finances of PierPass Inc. and the OffPeak program with the FMC, noting it recently published an in-depth review of the methodology it uses to calculate the cost for the terminals to operate the OffPeak gates. The company also met with shipper associations while in Washington.
Port of Long Beach to consider reducing container free time
