Marine Terminal Operators Suspend Saturday OffPeak Shift as Cargo Volume Falls

LONG BEACH, Calif., Dec. 23, 2008 – Marine terminal operators at the Ports of Los Angeles and Long Beach today announced that they will suspend Saturday OffPeak shifts due to declining cargo volume. The new weekly schedule comes into effect on January 17, 2009. The last Saturday shift will be on January 10, 2009.

As the economy has slowed sharply, cargo container volume at the two ports in October and November fell 19 percent compared with the same period in 2007. Labor costs on Saturdays are 1.5 times the base rate, while night shift labor rates are 1.33 times the base rate.

“With the drop in cargo volume, terminal operators must reduce their operational costs,” said PierPASS President and CEO Bruce Wargo. “When economic activity rebounds and cargo volume growth resumes, we will evaluate whether to reinstate the Saturday shift.” Wargo noted that there continues to be significant unused capacity during the second half of the night shift on weekdays.

The OffPeak program was established in 2005 to reduce congestion and air pollution in and around the Los Angeles and Long Beach ports. Under the program, all international container terminals in the two ports established five new shifts per week (Monday through Thursday from 6 p.m. to 3 a.m. and Saturday from 8 a.m. to 6 p.m.). As an incentive to use the new OffPeak shifts and to cover the added cost of the shifts, a Traffic Mitigation Fee (“TMF”) is required for most cargo movement during peak hours (Monday through Friday, 3 a.m. to 6 p.m.).  The program is administered by PierPASS, a not-for-profit company created by marine terminal operators at the ports to address multi-terminal issues such as congestion, security and air quality.

The marine terminal operators, through an independent consultant, are analyzing the current costs for the OffPeak program, assessing current traffic patterns and volume and the impact of ending the Saturday shift. The evaluation is scheduled to be completed in January. The terminal operators will then determine whether any modification to the TMF is warranted.

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