Posted by: PierPass Inc. | March 3, 2011

Eight Marine Terminal Operators Suspend One OffPeak Shift Amid Seasonal Slowdown

Four more marine terminal operators at the Ports of Los Angeles and Long Beach announced they will suspend one PierPASS OffPeak shift per week starting in March due to the traditional seasonal decline in cargo volume. Other MTOs announced an OffPeak gate suspension in February. This makes a total of eight terminal operators that have cut back to four OffPeak shifts per week.

Terminal operators are taking steps to adapt to market conditions during the traditionally slow period of January to April. Adapting the number of OffPeak shifts to match fluctuations in cargo volume helps ensure the viability of the OffPeak program.

Anecdotal evidence indicates that vessel calls at one terminal operator are down by about 25 percent compared to earlier this year, while another terminal operator reported it received zero vessel calls during a one-week period in February.

Extra weekly shifts are funded by revenue generated from the Traffic Mitigation (TMF), a $50 per TEU fee charged on container moves during peak daytime hours. The drop in cargo volume translates into reduced collection of the TMF. In the fourth quarter of 2010, the actual cost of OffPeak gates was $95 per TEU – a $45 shortfall per TEU.

Since PierPASS was created in 2005, revenue from the TMF has never fully covered the added costs of operating five OffPeak shifts. The cost to operate OffPeak gates is relatively fixed, so a decrease in cargo volume translates into an increase in the OffPeak cost per TEU. Suspending one OffPeak shift per week due to reduced volume should produce measurable cost savings during this traditional slow period.

The rollout of this suspension starts March 12. An updated OffPeak schedule is available on the PierPASS website.

During this period, PierPASS and marine terminal operators will continue to monitor conditions and take steps to avoid congestion.


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