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July 25, 2016 3:00 AM, EDT

Truckers, FMC Urge Changes to PierPass Fees

PierPass via YouTube

This story appears in the July 25 & August 1 print edition of Transport Topics.

Truckers and the Federal Maritime Commission are continuing to urge operational and financial changes in the PierPass program, the fee system that governs shipments through Los Angeles and Long Beach, California, the nation’s two largest ports.

The program, created in 2005 by terminal operators to fund second- shift dock labor amid rising cargo volume, now charges a traffic mitigation fee of $140.98 per 40-foot container for daytime loaded moves. However, moves after 6 p.m. are free.

Weston La Bar, executive director of the Harbor Trucking Association, told Transport Topics last week, “The program needs to be modernized to create a more efficient movement of cargo that is less burdensome for customers. There is no longer a need for a fee to incentivize cargo at one time of the day or the other.”

“There is still a lot of work to be done to optimize the potential of PierPass,” Federal Maritime Commission Chairman Mario Cordero told TT in an interview. “We are getting a lot of complaints about the amount of the fee. If you are the American shipper, you are asking yourself what am I getting for that money? The stakeholders are very frustrated with a lack of transparency.”

PierPass President John Cushing told TT the program successfully mitigates freeway and neighborhood traffic while relieving congestion. About 50% of containers move on each shift.

“The program has reduced the amount trucks calling at the terminals from 88% during the day. Since its founding, 35 million trucks have been moved to OffPeak, thus reducing congestion.”

Cushing said he understands that while some customers don’t want to pay the fee, it’s needed to fund the second shift. Last year, collections of $168.9 million fell $67.3 million short of operating costs, PierPass calculated.

Intermodal Motor Carriers Conference Executive Director Curtis Whalen urged a fresh look.

“A lot of my members are trying to figure out the costs related to the gate process,” he said. “Given the size of that complex and how many people it impacts, there needs to be a far more structured debate to find the best solution.”

Cushing said finances already are reviewed by two outside parties.

“PierPass has advised the FMC that it is currently addressing yet further financial review by yet another third-party CPA firm that was recommended by both ports and will also be working with the ports’ financial managers as well,” Cushing said.

Cordero still wants a different review, with an outside auditor determining methodology for calculating the program’s finances.

“That would go a long way to giving the stakeholders confidence,” Cordero said. “The BCOs [beneficial cargo owners] and the trucking industry are not convinced that the current program is the best approach.”

Cordero and La Bar endorsed Oakland’s $30 terminal fee, imposed on all trucking and rail container traffic, regardless of time.

While the FMC considers next steps, La Bar said HTA hopes to begin working with cargo owners and terminal operators to modernize PierPass through a working group. Failing that, he said, modernization might have to wait until December, when California’s Legislature could again take up the issue.

Congestion peaks in the late afternoon, when truckers line up to be first into the terminal without fee payment, La Bar and Cushing said. Cordero, meanwhile, criticized PierPass statistics, which count only time inside the terminal, instead both queue and terminal time.

“If I am a trucker or BCO and it takes me two hours to get that container, don’t tell me the turn time is 40 minutes,” he said. “Waiting time doesn’t do the supply chain any favors.”

PierPass second-quarter average terminal time was 42 minutes, but La Bar said HTA’s measured queue and terminal time totaled 83 minutes.

Cushing believes appointments are “working well” and said that all terminals are working to create a common web portal for appointments.

The current appointment system gives truckers up to four hours for a pickup. That’s ineffective, La Bar said, because BCOs want a more specific arrival time.

Truckers also encounter inefficiency when customers require an empty container pickup at no charge during the day and then a separate free trip at night for a load.

“We are creating more truck trips than necessary,” La Bar said, who advocated a flat fee to improve productivity and reduce congestion.