Four marine terminal operators at the Ports of Los Angeles and Long Beach announced they will suspend one PierPASS OffPeak shift per week due to the traditional seasonal decline in cargo volume.
The rollout of this suspension starts February 12. An updated OffPeak schedule is available on the PierPASS website at http://pierpass.org/offpeak-information/offpeak-schedule-2/.
Terminal operators are taking steps to adapt to market conditions during the traditionally slow period of January to April. Adapting the number of OffPeak shifts to match fluctuations in cargo volume helps ensure the viability of the OffPeak program. As cargo returns, the issue will be revisited, but Flex gates should not be impacted.
The drop in cargo volume translates into reduced collection of the Traffic Mitigation Fee (TMF) charged on cargo container moves during peak daytime hours. In addition to providing a financial incentive to move cargo during the OffPeak shifts, the TMF is intended to cover the cost of adding extra shifts per week.
Since its inception in 2005, revenue from TMF collection has not fully covered the added costs of operating the five OffPeak program shifts. The cost to operate OffPeak gates is relatively fixed, so a decrease in cargo volume translates into an increase in the OffPeak cost per TEU. Suspending one OffPeak shift per week due to reduced volume should produce measurable cost savings during this traditional slow period.
During this period, PierPASS and marine terminal operators will continue to monitor conditions and take steps to avoid congestion.