PierPass Operational Costs and Financial Report Available

Over the years, several customers and stakeholders have asked for more information on PierPass’ operational costs and financial statements. In an effort to provide the industry with this information, we have asked our third-party auditors to prepare a detailed summary of their findings. That summary is available here. You will see that the revenue collected significantly falls short of the costs of the program. We hope these summaries address any remaining questions.

TMF Increase Effective One Week from Today

As a friendly reminder, next week the adjustment to the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach will go into effect. Effective August 1, the current Traffic Mitigation Fee at the Ports of Los Angeles and Long Beach will increase to $60 per TEU / $120 per FEU for containers moving Monday – Friday, 3 a.m. – 6 p.m.  The fee increase will help to offset the increased cost to operate PierPass OffPeak gates.
 
The PierPass OffPeak program provides tremendous value and future growth potential to the goods movement industry, greatly increasing the capacity of America’s largest port complex without adding additional infrastructure. OffPeak gates help to minimize daytime traffic congestion, allow cargo to move faster at night on less crowded roads, and enables truck owners to deliver more loads through lower turn-times and twice the number of working hours in a day. The TMF funds the nighttime gates, which make these benefits possible.

If you have questions about the TMF increase, please call our customer service center at 1-877-863-3310.

OffPeak Gates and the Local Economy

First conceived of as an initiative to mitigate traffic congestion and reduce pollution in and around the Ports of Los Angeles and Long Beach, the PierPass OffPeak program has evolved over the past six years to serve as a major contributor of jobs throughout San Pedro Bay.

By essentially doubling the capacity of the ports through the addition of nighttime and weekend shifts, the program directly creates more than 200 jobs in the Ports.

Moreover, an untold number of additional jobs are created in the local area due to increased economic activity from OffPeak shifts. These jobs come in the form of security guards, logisticians, truck drivers, ship operators, and even waiters in local restaurants that staff-up for customers coming off night shifts.

Prior to the establishment of PierPass in 2005, Port employment was limited to regular daytime shifts. Fortunately, just before the economy began to decline, PierPass was created, increasing port capacity and, as a result, employment opportunities.

Today, the San Pedro Ports operate 122 shifts – of which 57 are PierPass OffPeak gates – for cargo pickup and delivery each week.

PierPass is committed to ensuring the Ports remain a consistent source of good jobs for those in the San Pedro Bay area by maintaining and building capacity, and continuing to improve efficiency of the Ports.

Marine Terminal Operators at the Ports of Los Angeles and Long Beach Postpone TMF Adjustment to August 1

WCMTOA announced it will postpone until August 1 its planned adjustment to the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach. The schedule change is in response to feedback from customers and other partners in the goods movement industry, and is intended to provide more time for cargo owners to prepare for the adjusted TMF.

While rate increases are never desirable, it’s important to recognize the value gained through adequate funding of the PierPass OffPeak Program.

Recall six years ago, before PierPass existed to address daytime truck and cargo congestion at the San Pedro Bay ports. Heavy traffic plagued freeways, neighboring communities, and roads leading into ports. Long lines of trucks, cargo sitting for extended periods, and ship delays were commonplace.

Fortunately, we’ve come a long way since then. Over the past six years, PierPass OffPeak gates have grown to handle approximately 55 percent of all container traffic at the ports of Los Angeles and Long Beach, have accommodated close to 20 million truck transactions during OffPeak shifts, and eased congestion in city streets and nearby freeways during normal business hours.

The PierPass OffPeak program provides tremendous value and future growth potential to the goods movement industry, greatly increasing the capacity of America’s largest port complex without adding additional infrastructure. OffPeak gates help to minimize daytime traffic congestion, allow cargo to move faster at night on less crowded roads, and enables truck owners to deliver more loads through lower turn-times and twice the number of working hours in a day. The TMF funds the nighttime gates, which make these benefits possible.

As an industry-driven solution to port congestion, the PierPass OffPeak program was created as a response to government and cargo interests, and its success is only possible because of feedback from stakeholders across the industry.  PierPass continues to encourage dialog among industry stakeholders in order to identify industry-driven solutions that promote the efficient movement of cargo through the ports.

MTOs Raise TMF to Sustain Continued Operations

Today, the West Coast MTO Agreement (WCMTOA) announced it will raise the current Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach to $60 per TEU (twenty-foot equivalent unit) in order to sustain continued operation of PierPASS OffPeak gates.

This is the first increase in the TMF since 2006. Since then, labor costs have increased 31 percent. The terminals have operated the OffPeak shifts at a loss since the program’s start in 2005. The shortfall between TMF revenues and OffPeak gate costs was $52.3 million in 2010.

With fifty-five percent of cargo movements taking place during OffPeak hours, the program has become an important element of port operations.

A number of options were evaluated by marine terminal operators to cut the losses, including adjusting the TMF, decreasing the services offered, or instituting a fee on OffPeak cargo. Adjusting the rate was determined by the marine terminal operators to be the most effective and least disruptive way to reduce the losses.

Beginning in mid-2012, the TMF will be adjusted annually based on changes in Pacific Maritime Association maritime labor costs.

The rollout of the TMF adjustment is effective July 4, 2011. Read the press release for more details. 

The Current State of Cargo Volume

Industry leaders have all agreed – international trade will continue to grow in 2011. However, growth in cargo volume in the Ports of Los Angeles and Long Beach is proving to be modest.

While historically, we have started to see cargo volumes pick up in May, volume has not returned enough to warrant reinstating the one PierPASS OffPeak shift that several marine terminal operators suspended earlier this year.

MTOs are continuing to take steps to adapt to market conditions and match fluctuations in cargo volume, helping to ensure the vitality of the OffPeak program.

As those numbers rise, the MTOs will review and reinstate gates as appropriate to ensure that congestion is not a problem in the ports.

Turn Time Study: Behind the Scenes

We recently had the chance to catch up with Dr. Val Noronha, President of Digital Geographic Research Corporation. We asked Dr. Noronha about his recently conducted Turn Time Study, commissioned to provide metrics for tracking and monitoring truck turn times.

Here’s what he had to say:

Q: Explain the methodology of the study – how were trucks monitored as they entered and exited the ports?
A: We relied on our archive of METRIS℠ data, which are GPS tracks gathered from drayage trucks that frequent the ports and move containers to destinations in the Los Angeles basin and beyond. GPS gives us location and it gives us time, which allows us to create very detailed trajectories of vehicles and to follow them as they go about their business. The GPS devices received real-time data 24/7 from the trucks from May to October 2010.
We monitored between 10,000 and 15,000 truck trips to port terminals each month, which was enough to drill down into segments of time during the course of the day, as well as by terminal.

Q: What was the sample size of the study?
A: The sample was 250 trucks serving the Ports of San Pedro. We had a very heartening response from the trucking industry. We had large and small companies involved, and most of the members of the Clean Trucks Coalition participated.

Q: There were several key terms that were defined in order to conduct this study – tell us more about this.
A: An important part of our study was defining time intervals, specifically queue time, terminal time and visit time. 

  • Queue time begins when a truck arrives in the queue outside a terminal and ends when it passes the entry pedestal.
  • Terminal time is the duration of truck dwell inside the terminal, including one or more transactions conducted at wheeled storage, grounded storage, chassis yard, help desk and other service areas within the terminal.
  • Visit time is the sum of queue time and terminal time.

Q: Why do you believe this study is important for the ports of LA and Long Beach?
A: These are enormous ports – they have a tremendous strategic role in the local, regional and national economies and they move close to $100 million worth of goods per hour.

The marine terminal operators (MTOs), ports, truckers and drivers are all businesses. They are competitive, but at the same time, they are a team, and they need to work in sync for their own success. All members of the port community need to understand each other’s experiences. A trucker needs to understand what it costs to operate a terminal, and the MTOs need to understand the experience of a trucker.

In terms of the focus of the study, we need to distinguish between forests and trees. Where are the big delays? Where are the small delays? What are the factors causing them? If we try something new, such as opening a night gate, we need to monitor the impacts.

This study sends a message to the customers of the ports. We’re not content being the No. 1 port on the continent. We’re going to use innovative technologies to stay ahead, we’re going to take our pulse regularly, and we’re going to improve what can be improved.

Q: What are some of the key findings from the research you conducted?
A: The periods around the noon, evening and night breaks are the primary concern. Service times spike, and these periods will need to be examined to ensure steady productivity. Also the hour or two leading up to 6 p.m., which is when we found that some trucks linger outside the gates until the traffic mitigation fee (TMF) lifts.

There are certain times of the day that are less busy than others. 3 p.m. is the magic hour. Visit time is lowest if you enter the terminals at 3 p.m. There is a lot of room for increased productivity at night.

Other than that, the study revealed that there is plenty of capacity in the ports. A surge in truck volume causes just a slight ripple in visit time.
A very important aspect, in my view, is that the parties have come together to address this issue cooperatively. That is huge. That communication opens up possibilities in terms of strategies that we can use in the future.

Groundbreaking Study Provides First Comprehensive Measurement of Truck Queuing and Visit Times at the Ports

PierPass Inc. and Ability/Tri-Modal Transportation Services Inc. today released the results of the Turn Time Study that uses Global Positioning System (GPS) tracking to provide a common language and set of facts that the port community can use to discuss truck queuing and terminal visit times at the Port of Los Angeles and Long Beach.

This study helps the port community discuss visit times based on factual information rather than on anecdotes, and provides the community a common set of metrics.

It evaluates three time periods: queue time, spent waiting in line outside the gates; terminal time, measuring from the entry gate to the exit gate; and visit time, the sum of queue and terminal time.

Key findings of the study include:

  • The median queue time in October was 20 minutes and the terminal time 31 minutes, for a total median visit time of 51 minutes.
  • The vast majority of visits take less than two hours: 27% are under 30 minutes, 58% under an hour, 75% under one and a half hours, and 86% under two hours. A further 12% of visits take two to four hours, and 1% to 2% of visits take between four and eight hours. 
  • About 91% of queue times were under an hour.
  • The median queue and visit times include trucks that choose to arrive early to wait for the 6:00 p.m. OffPeak to start.
  • The study found that daytime visits are shortest for trucks that arrive at 15:00. Median visit time for trucks arriving between 15:00 and 16:00 was 45 minutes, while for trucks arriving between 17:00 and 18:00 median visit time was 90 minutes, reflecting the 17:00 meal break.

When cargo volumes rebounded in the spring and summer of 2010, terminal operators opened additional service hours to hold down congestion. Those investments proved effective: while cargo volumes increased 6% from May to October, visit time decreased 13%, the study showed.

Stay tuned to PierPASS.org for a video about the study, as well as an interview with Dr. Noronha, president of Digital Geographic Research Corp., which conducted the study. Read the Turn Time Study Executive Summary.