SoCal terminals ?committed? to night shifts

SoCal terminals æcommittedÆ to night shifts    A nearly five-year-old program to extend the hours of operation at Los Angeles and Long Beach container terminals has been so successful that it has lured more than half of all cargo moving through the ports to do so during less congested nighttime hours.
   The OffPeak program, administered by a nonprofit organization called PierPass, was set up to more evenly distribute the drayage of containers in and out of the two ports' 13 container terminals. The terminals now operate four night shifts a week, from 6 p.m. to 3 a.m.; previously, gates were only open from 8 a.m. to 5 p.m.

Wargo

   PierPass President Bruce Wargo said Wednesday in an interview with American Shipper that 55 percent of traffic is moving during the night shifts established by the program. Wargo also said the 15 millionth container was recently handled during night shifts.
   'That's a significant number,' he said. 'That shows that the program is a core element of port operations. I always thought it we could reach equilibrium, we'd reach some sort of measure of success.'
   In recent weeks there has been speculation, however, that the program might be too successful for its own good. PierPass collects a $50 fee on each box that moves during the normal daytime shift, then redistributes the revenue to the terminal operators (minus 7 percent in administrative fees) to cover the extra costs of nighttime operations.
   Because more than half of containers are now moving at night — motivated, no doubt, in order to avoid paying the fee — and because night operations cost terminal operators more than day operations do, it's been theorized that terminal operators are losing money by operating the night gates.
   Wargo said PierPass is not privy to the financial details of each of the terminal operators it represents in the OffPeak program, but he said each operator is fully supportive of carrying on with the night gates.
   'The terminals are committed to the program,' he said. 'They understand how important this is to the customers. Politically and logistically, it would difficult to go back to one shift. The program will continue as long as we see value for the trade.'
   A major impetus for PierPass was concern over traffic congestion on local roads, and the associated environmental impacts, resulting from thousands of drayage trucks operating during peak rush hour times. Traffic on the freeways linking to the Southern California ports has been noticeably lighter since the program has gained momentum — though reduced container volumes since 2008 have also helped ease congestion.
   Meanwhile, Wargo said the fee is coming close to matching the extra costs of night operations, but the extra hours of operation mean more than just costs — shippers and carriers have come to depend on the arrangement.
   'When the program started, it was a huge demand on terminal operators,' he said. 'It's not being paid by ports or carriers. It's an unfunded policy and the program is a way to deal with a doubling of the terminal operators' costs.'
   The program has also had to function in a depressed demand environment. Until December, the Southern California ports had seen 18 consecutive months of falling volume — hence a decision by PierPass in 2009 to reduce the number of extra shifts from five to four.
   Wargo said the program, at its core, is a way to make the ports more efficient without expanding physical infrastructure in the port, and that when demand rebounds, another extra shift could easily be added if it was needed.
   PierPass is also attracting attention from other ports. Wargo said he regularly receives enquiries from other U.S. and international ports about the program.
   'This issue of congestion is not limited to Southern California,' he said. 'Most ports face these infrastructure questions as they grow.' ' Eric Johnson