By Eric Kulisch of American Shipper
Facing an unprecedented shipping crisis, which includes a record 61 container ships in the queue in San Pedro bay, the ports of Los Angeles and Long Beach on Friday announced their intent to extend operating hours at truck gates in an effort to reduce a massive backlog of containers gumming up retail, manufacturing and agricultural supply chains.
The Port of Long Beach is drawing up a pilot program for drayage trucks to retrieve and return containers at night, while the Port of Los Angeles is coordinating a weekend gate program, dubbed Accelerate Cargo LA, that will operate on a trial basis, officials said.
The news, however, came with few details on how the extra access would be carried out or who would bear the cost — and the measures may have limited immediate effect on the gridlock gripping the ports at the height of the peak season rush. But logistics industry officials said it was a positive first step.
Marine terminals in Southern California already participate in PierPass, a voluntary program of night and weekend gates funded by a fee on loaded containers entering or exiting the port by truck. Motor carriers are encouraged to spread their services among shifts to prevent bottlenecks. Long Beach Deputy Director Noel Hacegaba told American Shipper that the new initiative is designed to cover the hours between 2 a.m. and 7 a.m. PDT, helping to usher in an era of 24/7 operations that officials hope will take root among shippers and truckers as well.
The port authority is in talks with one marine terminal operator about operating around-the-clock and hopes to scale up beyond that over time, he said. The twin ports plan to provide details early next week about how the new programs will work and be paid for.
“Given the magnitude of the cargo volumes we’re seeing, every segment of the supply chain needs to maximize their hours of operation,” Hacegaba explained. “The Port of Long Beach is taking the first step toward a 24/7 supply chain. … The objective of this pilot is to open the gates all night and serve as a catalyst for warehouses and trucking companies to move containers all night.”
Many Asian ports operate without interruption and are extremely efficient, but the concept has not caught on in the U.S. despite much discussion.
Many U.S. port terminals temporarily tack on extra night and weekend shifts during cargo surges to clean out container yards or service a ship during an irregular period, but few stakeholders have been willing to bear the extra expense of permanent off-peak hours.
Craig Grossgart, senior vice president of ocean at SEKO Logistics, said about 35% of appointments are going unfilled “because truckers don’t want to pull at night because the distribution centers aren’t open.”
The alternative is to pre-pull containers to a secure storage yard, where the containers are kept on a chassis. But that type of operation is more expensive because it requires two truck moves and extra days of chassis leasing.
Freight transportation representatives noted that the gate initiatives won’t help unless warehouses are open at the same time to accept freight delivered by truckers, but applauded the effort to jumpstart reforms.
“At least somebody is trying something. There are just too many other supply chain service providers saying they can’t do anything because not everything is ready to be changed,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition. “The terminal operators say they can’t do anything because the warehouses don’t work 24 hours. And the warehouses say they can’t work 24 hours because the truckers won’t do it. But if everybody continues to say they can’t do anything unless others do things then nothing gets done.
“So at least somebody is starting here and that’s got to be applauded. It’s a lot easier to say you’re not going to try anything until everyone takes care of their situation than it is to actually try to implement something.”
Friedmann said throwing up night gates with little notice, as terminals often do, makes it impossible for truckers to plan their days within hours-of-service limits. With predictable, regular extended hours carriers and warehouses can plan their operations. And he said PierPass doesn’t work as intended, with terminals open sporadically at night despite collecting the fees to pay for them.
“That would be like saying, ‘Go to the airport, there may be a flight tonight. And come back tomorrow we might have flights going out in the middle of the day. We’ll let you know,” said Friedmann, a long-time critic of the traffic mitigation program. The AgTc has been vocal in urging federal action to stop ocean containers from denying equipment availability at inland locations and to stop terminals from charging late fees for container returns when the yards are jammed.
Container shipping volumes from Asia to the U.S. spiked 33% year-over-year through July and 26% compared to 2019, according to BIMCO and Container Traffic Statistics. The San Pedro Bay ports collectively handle more than 30% of all U.S. ocean imports and are the two largest domestic container ports.
The volume of containers, combined with COVID-related limits on dockworkers and insufficient truck, rail and storage capacity, have left facilities with huge logjams. Dwell time for containers at terminals is six days, the wait time for on-dock rail is nearly 12 days and it takes 8.5 days on average for containers on the street to find dock space at warehouses. The situation is so bad that 65 container vessels were stacked up along the coast Thursday waiting to berth and unload.
Import congestion at ports has caught the attention of the Biden administration, which has established a White House task force on supply chain disruptions to engage stakeholders on ways to solve bottlenecks that extend from the ports throughout the inland distribution system. Both ports are working with John Porcari, the administration’s ports envoy, and the task force to correct systemic inefficiencies in ocean freight transport.
Porcari supported the ports’ move and said he looks forward “to continuing to work with all stakeholders to strengthen the resiliency of our transportation supply chain.”
Recent efforts at improving efficiency in Long Beach include last week’s introduction of a Truck Alert program to notify truckers by text about traffic conditions and the development of a nearby container overflow yard that has expanded from 17 to 65 acres in eight months.
The port authorities hinted further measures are possible.
“We appreciate the leadership of the Biden-Harris administration in marshaling a response to the unprecedented global supply chain disruption so acutely felt here at the San Pedro Bay port complex,” said Port of Los Angeles Executive Director Gene Seroka in a statement. “These steps, in addition to what has previously been recommended, demonstrate that the Port of Los Angeles will continue to innovate in order to manage this historic cargo surge.”
The port authorities said they will heavily promote the off-peak gates to shippers and work closely with the trucking community to ensure drivers understand how to take advantage of non-peak times. They called on marine terminal operators to incentivize their use to reduce congestion and maximize cargo throughput.