Productivity Issues

After a season of disruptions at major East Coast and Northwest ports, opinions are flying about strategies to keep truck deliveries at the terminals moving quickly. We’ve produced a new video to help those concerned with container throughput issues to better understand the system as it exists today. The video walks viewers through a truck turn from the moment it enters the terminal with an empty container to the time it leaves the exit gate with a full load. (Our previous video explored truck queues outside the terminal gates.)

I encourage you to watch the video and share it with your constituents. The video is available by clicking on the image above or through this link: http://youtu.be/P9IJN1yIIJ4.

Compared to several other North American ports that have struggled in recent months with unusually bad weather, operational problems and labor disputes, conditions at the Ports of Los Angeles and Long Beach have been much steadier. In-terminal turn time – the average amount of time a truck is inside a terminal to complete a single transaction – increased gradually from an average of 37.5 minutes during day shifts in February 2013 to 40.6 minutes in February 2014, a rise of about 8%.

Nonetheless, we believe changes underway with several links in the goods movement chain are likely to continue increasing turn times unless we revamp some long-established processes. These ongoing changes include the arrival of ever-larger ships, and the transition in how chassis are owned and managed.

The current random-access system – when any truck can show up at any time to pick up any container – hasn’t changed since containerization began in the early 1960’s. If we’re going to significantly change the results, we need to reevaluate how we deliver containers.

The terminal operators and other stakeholders are looking at a range of potential tools to maintain throughput velocity under these changing conditions. Possible delivery improvements under study include pre-staging containers for bulk delivery (also known as free flow), pre-entering truck and cargo information into terminal computer systems, and using cellphone lots and smartphone applications to better coordinate truck arrivals and shift traffic out of gate lines.

Thank you,

Bruce Wargo

President and CEO, PierPass Inc.

January 24, 2014
Time to Face the Real Problems with Port Trucking

Bruce Wargo | Jan 24, 2014 10:00AM EST

Published in the Journal of Commerce (https://www.joc.com)

Like death and taxes, it seems certain that wrangling between trucking companies and marine terminals over truck turn times will always be with us.

Trucking interests and their allies have called for mandating terminal gates at the Ports of Los Angeles and Long Beach to remain open 24 hours a day, seven days a week, and want to impose penalties on terminals when turn times exceed a threshold. These efforts are misguided, based on both faulty data and a failure to face the real problems with harbor trucking.

Imposing such measures would achieve precisely the opposite of the intended effect, by significantly increasing the cost of doing business at the Ports of Los Angeles and Long Beach, driving away discretionary cargo, and thus reducing revenue opportunity for drivers and trucking companies serving the ports.

The turn time issue is a diversion that lets the trucking industry remain in denial about the real problems – too many trucks for the current volume of cargo, and inefficient port trucking practices.

Truckers face a big challenge to their economic model, which was built around used trucks that cost $15,000. Now they have new $100,000 trucks mandated by California and port clean air rules, and it’s a challenge for them to cover that increased cost under the current harbor trucking model.

Some of them are trying to make the case that they can’t pay for their trucks because the marine terminal operators aren’t working hard enough. But reducing turn times by a few more minutes isn’t going to solve their problems.

Turn times – the amount of time it takes for a truck to pick up or deliver a container at a marine terminal –have little to do with how much money truckers earn from port drayage. The idea that truckers could move more containers and earn more money if turn times were faster is based on faulty logic. All import and export containers at the ports already are being picked up and delivered. There are no extra containers waiting to be moved.

There are roughly 30,000 container moves a day and 10,000 port trucks. There are only two ways to change the average number of moves port trucks do in a day: Attract more cargo, or reduce the number of trucks. It’s simple arithmetic.

As long as those numbers stay constant, it’s a zero-sum game for truckers. The only way one driver can do more turns is by taking turns away from another driver.

A Finger on the Scale?

The Harbor Trucking Association recently introduced its Truck Mobility Report, which measures turn times at the LA and Long Beach terminals. While we welcome efforts by third parties to track cargo movement, we believe it is crucial for policymakers to understand what the numbers represent. What they certainly don’t represent is a benchmark to build policy around.

Consider this: if a bank opens at 9:00 a.m. and you show up at 8:00 a.m., is it fair to complain about having to wait an hour for service? That is how the HTA is tracking data.

Under the HTA’s methodology, it starts counting waiting time well before the terminal gates open. In the afternoons, if a truck lines up at 4:30 p.m. for the OffPeak gates that open at 6:00 p.m., the wait is counted as starting at 5:00 p.m., according to the HTA’s description of its methodology. In the mornings, the HTA says it begins counting wait times at 6:00 a.m., two hours before the gates are scheduled to open.

Initial lines typically disperse quickly after the gates open at 8:00 a.m. While a truck arriving at 8:30 a.m. will often be able to drive right up to the gate, a truck arriving at 6:00 a.m. is guaranteed a minimum two-hour wait. It makes no sense to average those times together and portray it as a measure of terminal efficiency.

Trucking companies need to start taking more responsibility for their business practices. By refraining from sending trucks to the terminals long before the start of the daytime and OffPeak shifts, avoiding the contractually-mandated lunch hours, and taking simple steps to avoid trouble tickets, they can significantly reduce their average turn times.

How Long is Too Long?

A question no one has answered: How long should turn times be, and why?

Picking up an import container at a terminal isn’t like picking up a cheeseburger at a drive through. More than a dozen important issues need to be addressed in security, financial integrity and safety during the process. Many of these checks are required by the Federal government to protect security and enforce trade requirements and duties, while others are required by the terminal operators to ensure that valuable cargo goes to its rightful owners.

Container shipping is a complex interplay among a large group of independent parties – manufacturers, cargo owners, shipping lines, terminal operators, labor unions, truck owners, truck drivers, chassis leasing pools, warehouse owners, logistics companies, railroads and more – and actions by any of those groups can easily throw the whole system out of whack. A case in point is the unusual congestion experienced at the ports in late December and early January this year. Multiple factors converged – a large number of ships arriving at the same time, a shortage of skilled labor due to holidays, and disruptions in the chassis pool as shipping lines transfer chassis ownership to third-party fleet operators.

Cargo owners and terminal operators are already investing heavily to prevent gridlock in and around the ports. Since 2005, our marine terminal operators have worked together through PierPass to address congestion issues by running OffPeak shifts on nights and Saturdays. PierPass has been extremely successful in meeting the objective of reducing congestion. The OffPeak shifts have enabled the Ports to avoid a repeat of the gridlock that brought cargo to a standstill in 2004. About 55% of container moves now happen during the OffPeak shifts.

There is plenty of unused capacity at the terminals. In launching PierPass in 2005, the terminals nearly doubled the number of gate hours per week. Container volume was expected to grow rapidly to fill the new second shift, but by 2013 it was only slightly higher than it was in 2005. For the ports to mandate 24/7 operations at current cargo volumes would be financial suicide.

The OffPeak program, which cost $161 million in 2012, is partly funded by the Traffic Mitigation Fee charged on non-exempt containers using terminal gates during peak hours. TMF fees, paid by cargo owners, totaled $111 million in 2012. The terminal operators made up the difference and contributed an estimated $50 million on top of the TMF to pay for the cost of the second shift.

Like other business owners, terminal operators must decide every day how to operate most efficiently amid changing conditions – how much labor to hire and when to deploy it, the optimal hours of operation, and financially viable levels of service. For a governmental body to dictate such things is a recipe for inefficiency and higher costs for all.

Ultimately, it’s the cargo owners paying the bills to move their cargo through the ports. Financial levies on other industry participants will flow through to the cargo owners and drive away their business.

The marine terminal operators are already bearing the financial burden of improving the efficiency of port operations. More governmental interference will not help, and will more likely than not hurt those it was intended to benefit. The real problem facing harbor trucks is one of oversupply – too many trucks chasing a finite number of containers. If the trucking industry is not willing or able to reduce the number of port trucks, then the only real solution is to increase the number of containers moving through the ports. The last things the ports need right now are higher costs and less flexibility.

Bruce Wargo is president and CEO of PierPass, Inc.

November 13, 2013
The Truth About Turn Times: PierPass Video and Journal of Commerce Article Shed New Light

To increase understanding of the truck turn time issue at the Ports of Los Angeles and Long Beach, PierPass has created two important new pieces of content.

The first is a video, “A Day in the Life of the Terminal Gates at the Ports of Los Angeles and Long Beach,” available above and through this link: http://youtu.be/dPvYq4rZI00

The second is an op-ed article that was published November 7 in the Journal of Commerce, available through this link: http://shar.es/87trh

April 12, 2011
Groundbreaking Study Provides First Comprehensive Measurement of Truck Queuing and Visit Times at the Ports of Los Angeles and Long Beach

PierPass Inc. and Ability/Tri-Modal Transportation Services Inc. released the results of a study that uses Global Positioning System (GPS) tracking to provide a common language and set of facts that the port community can use to discuss truck queuing and terminal visit times at the Port of Los Angeles and Long Beach.

The study evaluates three time periods: queue time, spent waiting in line outside the gates; terminal time, measuring from the entry gate to the exit gate; and visit time, the sum of queue and terminal time.

View or Download the Turn Time Study Executive Summary

View the Turn Time Study Press Release

Key findings of the study include:

  • The median queue time in October was 20 minutes and the terminal time 31 minutes, for a total median visit time of 51 minutes.
  • The vast majority of visits take less than two hours: 27% are under 30 minutes, 58% under an hour, 75% under one and a half hours, and 86% under two hours. A further 12% of visits take two to four hours, and 1% to 2% of visits take between four and eight hours.
  • About 91% of queue times were under an hour.
  • The median queue and visit times include trucks that choose to arrive early to wait for the 6:00 p.m. OffPeak to start.
  • The study found that daytime visits are shortest for trucks that arrive at 15:00. Median visit time for trucks arriving between 15:00 and 16:00 was 45 minutes, while for trucks arriving between 17:00 and 18:00 median visit time was 90 minutes, reflecting the 17:00 meal break.
  • When cargo volumes rebounded in the spring and summer of 2010, terminal operators opened additional service hours to hold down congestion. Those investments proved effective: while cargo volumes increased 6% from May to October, visit time decreased 13%, the study showed.
  • For the longest 10% of visits, the improvement from May to October was even better, at 15%.

The Truck Turn-Time Stakeholder Group (TTSG) was formed in July 2010 to address concerns about visit times. It includes representatives of trucking companies, marine terminal operators, cargo owners and the two ports. TTSG is co-chaired by Wargo and Joshua Owen, president of Ability/Tri-Modal Transportation Services Inc., a trucking, warehousing and distribution company.

PierPass contracted Digitical Geographic Research Corp. on behalf of TTSG to conduct this study, with funding from PierPass, Ability/Tri-Modal, the Port of Long Beach and the Port of Los Angeles. It relied on GPS devices installed in about 250 trucks at the ports under a research project funded by the U.S. Department of Transportation’s Research and Innovative Technology Administration.

Read more about the turn time study:

“The Port of Long Beach Supports Upcoming Turn Time Study”
March 31, 2011

“The Port of Los Angeles Supports Upcoming Turn Time Study”
February 25, 2011

“Turn Time Study in Progress”
February 8, 2011