Terminals are being asked to forgo charges even as they say they have incurred $22 million in additional expenses related to port congestion.
The National Retail Federation is asking that PierPass put a moratorium on its traffic mitigation fee in order to reduce congestion at the ports of Los Angeles and Long Beach.
In a letter to Bruce Wargo, PierPass’ chief executive officer, and John Cushing, the company’s president, Jon Gold, the vice president of supply chain and customs policy at the NRF, wrote, “We believe this could go a long way in helping to alleviate some of the issues that the ports are currently facing.”
The NRF request follows a similar request that was made by Mario Cordero, chairman of the Federal Maritime Commission, in a telephone call with PierPass executives earlier this week.
Cushing said in an interview Wednesday that he has not yet made a formal response to Cordero or the NRF, but that he told Cordero that he would bring the request to his members, the terminal operators in the port. But he said he told Cordero terminal operators may question why they are being asked to waive the fee that was “set up and successfully reduced congestion” by encouraging shippers and their drayage drivers to pick up and deliver containers at night.
Under the PierPass program, a fee of $66.50 per 20-foot container or $133.00 per 40-foot container is charged on daytime moves of containers moving locally (intermodal cargo moving by train inland is exempt from the fee) between 3 a.m. and 6 p.m. The fee is imposed Monday through Friday to offset the cost of operations in the evening and on weekends. Today, 45 percent of the cargo at the ports moves during the day.
Terminal operators “have incurred since Sept. 1 more than $22 million in unbudgeted and additional costs to address the congestion that has been brought to their terminals,” Cushing said.
“The chassis disruptions have been compounded by ocean carrier alliances that are dispersing cargo among more terminals, the arrival of larger ships, a shortage of rail cars and locomotives, and the struggles of trucking companies to retain drivers,” Cushing noted in a letter to terminal users last week.
Cushing said the majority of the 13 international container terminals at the Los Angeles and Long Beach ports are keeping truck gates open during lunch hours and shift changes. Terminals are also opening an hour early in the morning. Eight terminals are open on Saturday, a dozen terminals are open on Monday, Wednesday and Thursday nights, and all the terminals are open on Tuesday nights.
Cushing noted terminals are making those expenditures to pay for additional labor to “rework” and move cargo around the terminal.
He said that because of higher volumes and a shortage of chassis to move containers off of terminals, containers are staying on terminals longer and being placed in stacks that are wider and higher than is typical. For example, containers maybe stacked four or five high instead of three high, for example, or placed in locations around terminals where they are not below transtainers. As a result, longshoremen are having to spend more time to dig out of container stacks the particular container a driver has arrived to pick up or even spend more time looking to a place to put an empty containers.
He said that because of the chassis shortage, containers that would normally be drayed to an off-dock rail yard are not moving, and importers are asking them to be loaded on dock trains, leading to additional handling.
Fred Johring, the chairman of the Harbor Trucking Association, “It’s taking nearly as long to return an empty now as it has taken to pull a load. So when customers are screaming for their loads, you can imagine what gets left behind and that’s the empty.”
Johring says congestion continues to worsen at the two ports.
Cushing said, in some cases, terminals do not have space to receive empty containers. He said the terminals are speaking to the port authorities to see if open land at the port could be used for truck queuing or storage of empty containers.
Terminals are also moving containers from one terminal to another terminal in order to make up on-dock rail trains because there are not enough railcars being delivered for common destinations.
“They are taking containers over to locations within the port where they can get them loaded out, and this is all at great expense to the terminal operators,” he said.
“To waive the traffic mitigation fee … that money is used pay labor. And also there is concern that due to the great amount of congestion currently at the terminals, we would have an increased in daytime truck queueing,” said Cushing.
PierPass held a semi-annual meeting with an advisory committee of importers and exporters, trucking companies, terminal operators and shipping lines on Tuesday.
“While the traffic mitigation fee was discussed, the majority of the discussion dealt with practical solutions to address the congestion,” said Cushing.
He said a plan to move large lots of containers using what is called “free-flow” is being challenged by the chassis shortage.
He said there was also discussion of the need for increased communication between trucking companies and terminals so that when truckers arrive, the container they are seeking to pick-up is in an area of the terminal is accessible.
Earlier this month, the Harbor Trucking Association sent letters to the heads of the ports of Los Angeles, Long Beach and Oakland saying the group is assessing the solicitation of legal counsel to weigh the legal potential for enforcing various provisions of the UIIA California laws regarding equipment return, notification and gate hours. The options could include a class-action lawsuit.
The UIIA, or Uniform Intermodal Interchange and Facilities Access Agreement, is a standard industry contract between intermodal truckers/drayage companies and equipment providers, such as ocean and rail carriers, and equipment leasing companies.
Johring said the HTA has discussed with the FMC its desire to see the hours of service for Customs and Border Protection personnel at the ports extended to enable the night shift to deliver containers until 2:30 a.m. instead of 1 a.m. The HTA also is considering a formal petition and administrative action with the Federal Motor Carrier Safety Administration for permission to extend the hours of service that truckers can work from 14 to 16 hours because of the congestion.
Sara Mayes, the president of Gemini Shippers Association, said that the congestion has been a “nightmare” for shippers. She said one member had a container misplaced that took 45 days to locate because of congestion at the terminal.
“They call it UTL — unable to locate,” she said. “That’s what I call container hell.”
Another member was unable to get parts for a production line, and one was fined $10,000 a day in chargebacks from a customer because it was not delivering goods on time.
“Honestly, I don’t know if anybody has had no problems,” she said. “Everybody is paying demurrage.
She said some terminals are waiving demurrage, but said it may not be for long enough periods.
“It is waived for four days, and the trucker is supposed to pick it up on the fourth day, and he goes in, and no chassis are available,” she said. “I would say the delays are probably at least a week. In the past you were usually able to pick up your container within a day of freight payment and customs clearance. Now you are probably talking a week, maybe more.”
Retailers, FMC ask for PierPass fee to be waived
