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American ShipperShippingTrade and Compliance

Vancouver cuts truck wait times

Western Canada container port gains newfound momentum from electronic appointment system.

   When U.S. Federal Maritime Commissioner William P. Doyle Jr. heard that waiting times for truckers at container terminals in Vancouver, British Columbia, had plummeted—the port reports at many terminals it now hovers around 30 minutes, including queue times outside container gates—he decided to travel to Canada to see the system for himself.

   “They couldn’t deal with the trucks, they couldn’t deal with the volume and then within a six-month period everything seems to subside and what I heard is that they had put together an appointment reservation system. So I said, I want to see this,” Doyle said in an interview.

   Drayage truckers have conducted three major work stoppages at the Port of Vancouver in recent years—in 1999, 2005, and 2014 when around 1,200 drivers refused to service container terminals in Vancouver for four weeks in February and March.

   Louise Yako, president and chief executive officer of the British Columbia Trucking Association, said that only 40 percent of normal movement was taking place at the height of the job action.

   A report prepared for Transport Canada on last year’s dispute noted the main issues were similar to those in 1999 and 2005: “terminal wait times, reservation policies, rate undercutting and inequality in rate of pay, lack of an industry-wide auditing system, and lack of proper enforcement of audit judgments.”

   Doyle’s trip was all the more timely, with similar developments underway at ports in the United States.

   In the ports of Los Angeles and Long Beach, where five terminals have reservation systems, an additional five companies have announced plans to do the same early next year.

   An appointment system is also one of the recommendations of the Council on Port Productivity of the Port of New York and New Jersey.

   “We are pursuing a port-wide system, rather than every terminal having their own system like select L.A./L.B. terminals have today,” said Bethann Rooney, assistant director of the Port Commerce Department at the Port Authority of New York and New Jersey.

   GCT Bayonne, which is a sister company to GCT Global Container Terminals’ two facilities in Vancouver—GCT Deltaport and GCT Vanterm—expects to introduce a “partial truck management program late this year.

   In New York, Rooney said the plan is for appointments to be managed through what the port calls Port Truck Pass, which resides on the Terminal Information Portal System (TIPS) that was launched by the New York/New Jersey port authority on Sept. 1.

   “Appointments are the next natural evolution,” Rooney said. “We have the benefit of learning from others who have gone before us, including feedback from users of other appointment systems (truckers, beneficial cargo owners, etc.) to identify the rules and parameters that are required for a successful system. We have not completed the process of developing the rules/features, but fundamentally all terminals will be on the same platform, yet able to set rules specific to their facility.” For example, she said one terminal may be able to handle 500 appointments per hour and another only 400 per hour.

   The regional port authority, Port Metro Vancouver (PMV), has four container terminals that handled more than 2.9 million TEUs in 2014. In addition to GCT Deltaport and GCT Vanterm, the terminals include DP World’s GCT Centerm and the smaller Fraser Surrey Docks on the Fraser River.
Peter Xotta, vice president of planning and operations at PMV, said the port faces the same challenges as others, such as absorbing the increasing use of big vessels and larger consortiums.

   These include issues around drayage, which traditionally has a low barrier to entry for new drivers. He said this can lead to oversupply of workers, as well as some who are not 100 percent committed to the industry.

   After the 2005 disruption, PMV was mandated to put in a truck licensing system that allowed it to “definitively know how many trucks were involved in port drayage and we set about frankly to at least attempt to limit that,” Xotta said.

   All four terminals also put in appointment systems.

   Like other West Coast ports, a large share of the imported containers at PMV are put on trains and moved inland to points in the Midwestern or Eastern United States and Canada. Xotta said only about 10-20 percent is bound for local destinations. However, the exact share is hard to pin down, since he estimates 30 percent of the port’s containerized cargo is drayed off, transloaded into domestic containers, and then taken to a railhead for inland shipment.

   “Fast forward to 2014. We had been developing a transition program for the truck licensing system that was in place and intended to address some of the things that weren’t working as well as we would like, and so with the disruption, we essentially accelerated that transition program,” Xotta said.

   “One of the pieces that gave us really great insight into what was happening both from a performance perspective, etc., and utilization perspective is the GPS program that we have,” he said. Using government funding, the port had global positioning satellite units installed in about 1,950 drayage trucks, the port’s entire drayage fleet.

   “So at least we could take a lot of the anecdote out of the discussion around what was happening, what the performance was” at the terminals, he said. In 2014 cargo volumes were going through a peak, and the port created a model to determine how many drayage trucks were needed.

   “That led us to the conclusion that we had, even at 2,000, several hundred too many trucks and we set down a path of trying to reduce that,” Xotta said. A Transport Canada report in September 2014, estimated the port had 2,044 drayage drivers: 1,172 who worked as company employees (1,052 local and 119 long-haul) and 872 owner-operators (817 local and 55 long-haul). While there are 150 companies in the Vancouver drayage market, the 20 largest companies control 52 percent of the trucks.

Resolving Frustration. Gavin McGarrigle, British Columbia area director for Unifor, the largest private sector union in Canada, said Unifor represents about 600 drivers and together with other unions about half are union members.

   About 1,200 drayage drivers stopped serving Vancouver container terminals in February and March 2014.

   Lisa Raitt, Canada’s minister of transport, initiated an independent review of the issues and the federal and provincial governments, along with Port Metro Vancouver and two groups that represent truckers (Unifor and the United Truckers Association), negotiated a “joint action plan.”

   Draymen returned to work and a new position, British Columbia container trucking commissioner, was created. The commissioner grants the licenses that truckers are required to have to bring containers to and from the port, instead of PMV performing this function. He also is required to update rates that trucking companies are entitled to charge for moving cargo between the port and various locations. In addition, the commissioner is supposed to audit companies to make sure they are complying with those rates.

   “From our perspective we had those three legs of the stool. You have the commissioner’s role in terms of both supply management and pricing and our role is really around standards,” Xotta said.

   PMV is “essentially creating a drayage or company scorecard in terms of how well they’re performing, how many turns they’re getting, what their utilization is of the licenses that they have, in part to help the commissioner make decisions around granting licenses or taking away licenses if somebody has licenses that they’re not utilizing,” he said.

   The changes “drive a more professional kind of dynamic within the drayage sector and frankly to have good data so that if drivers claim that they’re not earning enough money, we can validate that. We can also make decisions around the number of trucks that are allowed to access the port in order to ensure that those that are accessing it can earn enough by virtue of the amount of business that’s available to them,” Xotta added.

   It is, he said, a “level of intervention in the marketplace that is a consequence of the disruptions that we’ve had. It was not something that was our first choice, but it’s something that we found necessary to do and that I think is driving a benefit.”

   GCT Canada said the agreement has “provided the truckers a greater number of gate times to access the terminals. This has a cost to terminal operators, but allows a greater efficiency for the drayage community.”

   PMV is now working on creating a common reservation system for terminals that would not dictate business rules to container terminal operators, but allow trucking companies to optimize their operations. GCT Canada, whose two terminals use the same reservation system, said it supports a common reservation system for all terminals, adding “consistent rules around the implementation of a common system are most important to ensure fairness for truckers across all terminals within a port.”

   For example, GCT Vanterm and GCT Centerm, are both located in downtown Vancouver, close to one another.

   It is now up to the local trucking company dispatcher to try to match the reservation for, say, an import at one terminal with an export at the adjacent one.

   A common platform would help the dispatcher know what is available and help truckers become more productive, Xotta said.

   Last year the three large container terminals began offering five night gates per week and requiring drivers to make reservations for both day and night container pick-ups and deliveries.

   GCT Canada said the day gates for its terminals run from 8 a.m. to 4 p.m., while the night gates operate from 5 p.m. to 1 a.m. Saturday day and night gates are available at GCT Deltaport, as well.

   Unifor’s McGarrigle and GCT Canada both agree about half the container cargo now moves in and out of terminals at night.

   The port has reduced wait times at its terminals from over an hour to about 36-37 minutes, Xotta said, including queueing time outside the terminal. The port is able to measure wait time outside terminals by “geo-fencing,” using computers to map areas just outside the terminal gates and GPS units inside each drayage truck to see how long the trucks are waiting to enter.

   GCT Canada noted terminal truck times at its terminals were 31.9 minutes on average in 2014 and have improved to 24.1 minutes in 2015 year to date.

   “So, we’ve virtually eliminated wait time for truckers and we’re busy working through this transition with the provincial commissioner whose job it is to make sure the trucking companies are compliant with the rules of engagement so to speak, and hopefully truckers who are participating in the system are commercially successful,” Xotta said.

   Drivers must pay a $50 fee for a reservation during the day which, like the similar (albeit larger) PierPass fee in the ports of Los Angeles and Long Beach, is used to fund night gates. There is no fee at night.

   (The smaller Fraser Surrey Docks does not require a second shift and so does not charge for reservations.)

   The fees are “not governed through the authority, it’s something the terminals have done voluntarily to offset the cost of providing those night gates consistently,” Xotta said.

   GCT Canada said reservations can be made up to three days in advance and right up to the hour requested, based on availability.

   It explained that at its two Vancouver terminals, truckers are currently provided a two-hour window to meet their appointment times. This includes the hour of their appointment, as well as half an hour leeway before and after their appointment. If an appointment is canceled prior to the cutoff, then a $50 credit is applied. However, if an appointment is canceled after the cutoff or there is a no-show, then no credit is applied.

   If terminal operators cannot turn a truck in 90 minutes, then a $50 penalty applies.

   The B.C. Trucking Association said the joint action plan also applies $25 for every 30 minute period after two hours and 2.5 hours, and $20 for every 30 minutes after three hours.

   Xotta said the port is no longer seeing the same level of “pulsing” at terminals, where trucks line up just before a terminal opens in the morning, for example. The flow of trucks has been smoothed out over the course of the day.

   Yako of the B.C. Trucking Association said “When they doubled the truck gate hours they immediately improved the turn times on the container terminal property, so they are now I believe the quickest turn times in North America. On average it’s like 30 minutes and certainly the vast majority of them are no more than an hour. There are still some outliers, but it’s been an incredible improvement.

   “But it has been at a cost,” she said, noting in addition to the $50 reservation fee, truckers must now pay a fee if they cancel a reservation.

Lingering Concerns. Today, the number of drayage drivers in the port is “something north of 1,700 to 1,750,” Xotta said. “We think there’s scope for further reduction. We’re hoping to do that through attrition over time, but again that’s a responsibility and a decision that now rests with the provincial commissioner.”

   However, Yako said while the terminals have doubled the hours they are open, they have only increased the number of reservations by about 20 percent, spreading them out over a much longer period of time.

   Yako said it also appears the terminals may be increasing the number of reservations during the day and reducing them a night.

   She also believes night gates five days a week may be overkill, that when it was first proposed the possibility of opening
for two or three afternoons were discussed. “In essence we are paying for excess capacity,” she said.

   Yako said there are some shippers who are willing to take on the added cost, “particularly smaller customers who don’t have any flexibility in terms of when they can either receive or ship containers and are willing to pay that $50. But I would say it’s not across the board.”

   She said because reservations may not be available when truckers need them, there may be extra moves of containers.

   “Whereas before you might have been able to take a container straight onto the container terminal or go and pick one up, or you may have been able to do back-to-back trips, that may not be possible today,” Yako said.

   She also pointed out many empty containers in Vancouver are stored at off-dock locations, so drivers have to pick up or drop off empty containers at other locations.

   Unifor’s McGarrigle said because many businesses are not open at night or customers do not want to pay the $50 fee for an appointment during the day drivers may pick up a container “and then just park their truck and wait to deliver it the next day. Or they are picking cargo up and waiting to drop off at night.
“What we’d like to see, if there is going to be a reservation fee, that it be spread equally across day and night, and we think that would be better,” he said.
There has also been controversy about the B.C. trucking commissioner’s job and the money due truckers, McGarrigle said.
The union believed the first commissioner, Andy Smith, was the wrong person for the job, because he was also serving as president of the British Columbia Employers Association (BCMEA).

   “The fox was guarding the hen-house,” McGarrigle said.

   The union complained Smith was not enforcing the joint-action plan’s rate of pay, which McGarrigle said is $25.13 per hour when a driver is hired and $26.28 after a year of service.

   Yako said her group found Smith “available to our members” and “engaged in trying to address concerns. We had the sense he was doing his part to meet with all parties.”

   “A vast majority of companies thumbed their noses at these increased rates and just simply refused to pay,” McGarrigle said.

   He added he has also heard rumors that some truckers raised rates to shippers, “but just pocketed the money.” If true, he said, that could create financial problems for them when they are forced to pay back wages.

   In September, Smith resigned and British Columbia Minister of Transportation and Infrastructure Todd Stone appointed Corinn Bell as acting commissioner and Vince Ready as acting deputy commissioner.

   Bell and Ready are well-known mediators who helped broker the 2014 joint action plan.

   “Now that an acting commissioner and deputy are in place, the office has the leadership in place to fully enforce the act,” Stone said.

   The 2014 joint action plan mandated a 12 percent increase in owner-operator rates and a minimum hourly rate for drivers to be paid from April 3, 2014, McGarrigle said.

   There is a schedule of rates that must be paid by each marine terminal to various communities near the port. Long-haul moves are excluded.

   “I wouldn’t know who is paying or who is not,” Yako said. “What I will tell you is that the government had committed to all of the carriers being audited to ensure they are complying with the law.

   “I do believe that there is some confusion about definitions and which rates apply under what conditions,” she said. “I’ll give you an example. There is an off-dock rate schedule that was published along with the regulations in December 2014 and it just gives destinations by municipality.

   “Because companies are having to stage the containers because they might not be able to deliver or they might not get a reservation when they need to, what should be a one-shot trip might end up being broken up and having the containers staged at some point. So, there are some questions around, does that constitute one trip or does that constitute two trips? Those are the kinds of interpretation questions that have yet to be answered,” Yako explained.

   John Cushing, president of PierPass, said there is no contemplation of a separate fee for reservations in Los Angeles or Long Beach at the five terminals that have reservations systems today—APM Terminals, Eagle Marine Services, West Basin Container Terminal, Seaside Transportation Services, and Total Terminals International—or the five planning to implement appointment systems in 2016—Trapac, Long Beach Container Terminal, SSA Terminal’s Pier A, International Transportation Service, and Pacific Maritime Services.

   Nor is there any plan for penalizing terminals if they can’t perform within a specific period of time, he said.

   “Outside the terminal we cannot control. There are truckers who will get to the port a 4 p.m. with no intention of going inside until 6 p.m.” when “offpeak” hours begin and they do not have to pay a PierPass fee, Cushing said.

   He noted that unlike in Canada where truckers own their own chassis, most truckers in the United States do not. And Cushing said there are far more off-dock facilities for handling empty containers in Vancouver.

This article was published in the November 2015 issue of American Shipper.

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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