News / PierPass shelves permanent TMF plan as Long Beach calls for 24/7 supply chains

In an effort to alleviate logistical bottlenecks, the Californian port of Long Beach has called for stakeholders all along the supply chain to extend working hours.

However, an attempt to make PierPass charges, supposed to spread truck traffic through the day, permanent has been shelved following intervention from the US Federal Maritime Commission (FMC).

PierPass is a not-for-profit company created by the West Coast MTO Agreement (WCMTOA), made up of the 12 container terminal operators at the ports of Los Angeles and Long Beach, to address issues such as congestion, air quality and security.

It launched the OffPeak programme in 2005 to reduce severe cargo-related congestion on streets and highways around the ports, establishing regular night and Saturday work shifts to handle trucks delivering and picking up containers at the terminals in the two adjacent ports.

PierPass said: “Subsequent to the amendment filing, WCMTOA has been providing statistics to the FMC about gate activity and terminal operations on a weekly basis. Those statistics did not support the requested changes attempted to incentivise offpeak traffic through pricing. Therefore, WCMTOA will rescind its amendment and return to the OffPeak programme, also known as 2.0.”

However, FMC chairman Daniel Maffei was ruthless in his condemnation of the move, saying he fully supports measures to encourage extended gate hours in an effort to alleviate congestion.

However, he added that neither he nor others could have known that these incentives would be used, “by those advocating off-peak gate incentives”, for profiteering.

“PierPass’s proposed fee structure generates revenue well above what is currently required to implement the programme in a revenue-neutral manner. PierPass claims to be cooperating with President Biden’s port envoy [to the White House Supply Chain Disruptions Task Force John Porcari], but apparently only if it can rake in millions more in profits paid for by American importers.”

Nevertheless, Mario Cordero, executive director of the port of Long Beach, wants truckers and warehouse operators to follow the port’s suit and embrace 24/7 operations.

“We will continue to advocate for transformational change – 24/7 operations. Not just here, but throughout the supply chain,” he said. “There are 168 hours in a week. For the most part, our terminals are open less than half those hours.

“Without expanding our terminals or building new facilities, we could handle still more cargo by utilising more of those hours. We’d also need truckers and warehouses to go 24/7. With the Biden administration’s help, the framework for 24/7 supply chain operations has been established.”

He added that in some Asian countries, logistics were, more or less, running 24/7.

Round-the-clock gate hours have been a central plank in the port authority’s efforts to tackle the congestion that has clogged its terminals. While this has brought some relief, forwarders find that it has not significantly moved the needle.

Bob Imbriani, EVP international of Team Worldwide, has not seen much improvement from the extended gate hours at Long Beach. The situation has become only slightly better as a result of this effort, he said.

And Craig Grossgart, SVP global ocean at Seko Logistics, said he was sceptical about the scheme from the outset, arguing that it required reciprocal action from other stakeholders – truckers, rail operators, warehouses and importers.

Pushing 24/7 operations all along the supply chain is a logical step that has potential to significantly improve cargo flows, Mr Imbriani said, adding: “It is something that makes sense.”

He questioned if the strategy can be implemented, though, pointing to the labour shortage that has afflicted logistics operators, from drivers to warehouse personnel and clerical staff.

“You have to start running three shifts and you need the people to do that.”

While recruitment has been a massive challenge, it is even more difficult to find candidates for positions that require a certain level of training, he added.

Employers have argued that labour unions were opposed to round-the-clock operations. For their part, labour organisations have claimed that terminal operators were not willing to recruit more qualified personnel at union-level wages.

There is also the question who ends up paying for the extended operating hours.

“When everyone is working 24/7, how is that going to affect pricing?” asked Mr Imbriani. “Is the higher cost going to be passed on to the importer?”

Team Worldwide has not opted for 24/7 operations. Instead, it has extended opening hours at some locations and adopted a more flexible approach at others. Some facilities operate 12, 14 or 16 hours, others open on weekends or at 2am to receive cargo and perform transloading.

In many cases there is not a need for 24/7 operations, or the volume does not justify this.

“If all our facilities were running 24/7, there would be a lot of down time,” Mr Imbriani said.