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American ShipperShippingWarehouse

Customs brokers, freight forwarders oppose Port of Long Beach proposal to reduce container free time

Changes to free time policies “must be carefully considered” and should not come until after a planned overhaul of appointment systems, the Los Angeles Customs Brokers & Freight Forwarders Association said in a letter last week to the Port of Long Beach.

   The Los Angeles Customs Brokers & Freight Forwarders Association (LACBFFA) said in a letter last week to the Port of Long Beach that it stands against any proposed reduction in free time.
   The Southern California port said last month it would consider reducing the amount of time import containers can be stored on docks without charge – also known as “free time” – in order to increase the velocity of cargo moving out of its container terminals.
   “The reduction of free time is a significant change which must be carefully considered,” said LACBFFA.
   The group noted that the number of terminals requiring truckers to have appointments before they can pick-up cargo will rise from five to 10 of the 13 terminals at the ports of Los Angeles and Long Beach next year.
   “We propose that there be no change in free time until an analysis is completed on the impact of the implementation of 75 percent of the San Pedro Bay moving to appointments,” it said.
   John Cushing, the president of PierPass, whose members include the major San Pedro Bay marine terminals, said the five terminals will phase in their appointment systems during 2016. He said it is the port that sets policy on how much free time there is for containers at its terminals.
   The Port of Long Beach met with members of the West Coast Marine Terminals Association to discuss its plan earlier this month, which Cushing said could be beneficial to port productivity because container operators would have fewer containers to sort through each time they need to retrieve one for a customer. Today, terminals have to move an average of three boxes each time they need to get to a specific container for a customer.
   Last month, the Port of Long Beach said it would consider reducing the amount of container free time at its terminals four days to six shifts.
   The change is being made, it said, to better deal with volume surges from the proliferation of larger vessels calling the port regularly and “to encourage terminals to more consistently operate at night, moving imports off the docks faster.”
   Long Beach is laser-focused on doing what it takes to drive velocity and reduce the need for free time, CEO Jon Slangerup said Dec. 8 at a Journal of Commerce conference on port performance in Iselin, N.J.
   “Demurrage…should not be something that is either used as punishment or as revenue generation for storing containers on terminals,” but “we would like to see a significant reduction in the amount of time that a container dwells on the terminal because we do not have the land to be a warehouse for those terminals,” he said.
   The LCBFFA said that although it understands the intent of the proposal is to increase the throughput of container terminals, it believes the proposal fails to consider that most beneficial cargo owners (BCO’s) are not using the terminals for “low cost storage,” but want to pick up their containers immediately upon discharge.
   Those BCOs are unable to do so because of a lack of visibility to future cargo availability dates, and that they and their draymen “can only react to pick up after they have received notification that a container has been discharged,” LCBFFA argued. “We believe that publicizing projected future container discharge, and where appointments are used, enabling appointments based upon this anticipated discharge is a better way to decrease terminal dwell time by reducing the dwell on the front end rather than the back end.”
   The group also said that there is insufficient drayage capacity due to federally mandated hours-of-service regulations that cut into daily driving time when drivers are stuck in terminal queues.
   “Inefficient terminal operations, including chassis shortages, result in terminal dwell times exceeding one hour, which decrease the number of turns that any one drayman can make within their Hours of Service limitation,” it added.
   Terminal operations “radically drop in efficiency near the end of the second shift,” the group said, resulting in almost no gate moves after 10 p.m. As such, LCBFFA proposed the port require terminal tenants to provide POLB with confidential reports that list by BCO the size of each container and the terminal dwell in number of gate shifts.
   “We believe that the port will find that it is a relatively small number of BCOs using terminal space for the storage of containers,” LCBFFA said, and it suggested Long Beach use that information to “address the excessive dwell time issue with these limited BCO’s rather than punishing the entire shipping community.”
   If POLB does go ahead with its plan, forwarder and broker group said the port should retain an exception for demurrage on cargo being held for inspection from government agencies such as Customs or the Department of Agriculture. LCBFFA also asked that similar provisions be included in the tariffs of both Los Angeles and Long Beach.
   Cushing and Jon Gold, vice president of supply chain and customs policy of the National Retail Federation, said they favor a uniform policy for free time at both ports. The Long Beach port authority hopes to get permission from the Federal Maritime Commission to coordinate with Los Angeles a program of “flexible” free time based on shifts, Slangerup said.
   Gold said the NRF appreciates the effort by Long Beach to try to speed cargo through the port, and is currently working up its own letter on the subject of container free time, but said his members have questions about the how the policy would work if the port or terminals are closed, and how demurrage and detention would be affected.
   LCBFFA said it wants the Port of Long Beach to “reconfigure demurrage calculations from a simple daily calculation to one based upon the discharge of the individual container and the number of full gates shifts available. Therefore if any terminal fails to make available a gate shift, or terminate any gate shift before the full shift time (even by one minute) that the gate shift would not count in the free time calculation.”
   It added the port should provide a simple automated process to claim an extension to free time of two gates shifts when a terminal prematurely closes any gate operations; when appointments are available a terminal is unable to provide an appointment within the subsequent two gate shifts; and when a terminal is unable to deliver a container within 60 minutes because, for example a container cannot be found or there is a chassis or labor shortage.
   The port should also “establish procedures which can immediately provide temporary extension should a port wide congestion issue arise,” LCBFFA said.

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Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.
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