Capacity Bunch
The Journal of Commerce Magazine - News Story - Bill Mongelluzzo | Aug 2, 2010 4:00AM GMT

Southern California port truckers say terminal congestion is to blame for fears of peak-season capacity shortage.

The harbor drayage community in Southern California is warning there will be a shortage of truck capacity during the peak shipping season.

Representatives of the ports of Long Beach and Los Angeles, marine terminals, harbor trucking companies and the International Longshore and Warehouse Union are so concerned about a capacity crunch this fall they have formed a working group that will meet regularly and address the potential crisis as it develops.

The Port of Long Beach reports 8,150 trucks are available to serve its container terminals, but on average only 5,392 show up each day.

Some trucking executives, however, say terminal congestion is causing a shortage of effective trucking capacity. “Terminal congestion is definitely the cause,” said Josh Owen, president of Ability Tri-Modal, a Carson, Calif.-based third-party logistics provider.

Terminal operators last year reduced manning, eliminated lunchtime and flex gates and dropped one of the weekly second shifts under the PierPass program. Even though container volume at the ports dropped about 15 percent, the cutbacks caused long lines beginning in late 2009.

This year, with volume up about 15 percent in the first six months, congestion is growing, a sign of the difficulties various points in the supply chain are seeing as operations struggle to adjust to the rapid rise in freight demand this year. At the California ports, it is not unusual for trucks to wait three to four hours at terminal gates. The effective capacity of the harbor trucking fleet is reduced when truckers are sitting in line rather than shuttling cargo.

Owen said his drivers need at least three turns per day to pay their expenses, including the notes on new trucks mandated by the ports in their clean-trucks programs. The drivers today are averaging 1.6 turns a day.

Even though on paper it appears there are enough trucks, including more than 6,000 clean trucks, to meet the ports’ needs, the numbers mean nothing when marine terminals are congested, said Fred Johring, president of Golden State Express, a Rancho Dominguez, Calif.-based drayage carrier. “We have to do something about turn times,” he said. On the ocean side, slow steaming of vessels this year has reduced the effective capacity of the global container fleet and equipment significantly. Terminal congestion has the same impact on the harbor trucking fleet.

Johring said it has gotten so bad harbor truckers are struggling to handle their steady customers let alone provide capacity for new customers who are begging motor carriers to move containers.

The Harbor Trucking Association representing drayage companies in Southern California published a list of steps that must be taken to relieve congestion. Terminal operators must maintain continuous operations by working through breaks and the lunch hour and between the end of the day shift and the beginning of the PierPass night shift, the association said.

Also, terminal operators should all return to five night gates per week. The terminals should commit to a maximum turn time for truckers and commit to paying wait time when the maximum is exceeded, the trucker association stated. The association said it is not prepared to seek legislation in Sacramento to force these issues but is not ruling out that option.

It is generally agreed the worst time of the day is late afternoon. Truckers begin lining up as early as 3 p.m. However, they do not enter the terminal until 6 p.m. because the importers and retailers they serve do not want to pay the $100 per 40-foot container PierPass fee charged on moves before 6 p.m.

While the fee has pushed about 50 percent of the pickups to the night gates, the transportation community is trying to discourage the late-afternoon bunching of trucks. Bruce Wargo, president of PierPass, said variable pricing, or a sliding scale of fees, is being discussed.

Another suggestion is to levy a minimal fee, such as $15 or $20, on every move, regardless of whether it occurs during the day or night, with the revenue used to compensate terminal operators for maintaining five night gates a week. Wargo said, however, this option would probably drive most of the gate moves back to daytime hours, and the congestion would go with the traffic.

At recent harbor meetings, angry truckers demanded the ports use their leverage as landlords to force terminal operators to better deal with the congestion problem. But Chris Cannon, project manager of the clean-trucks program in Los Angeles, said the ports’ options are limited because they do not actually operate the terminals.

“We are very concerned about this problem, but there’s only so much we can do under our leases,” Cannon said. The ports’ best option is to assist the private sector in developing a solution that works best for all sectors, he said.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com

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