PierPass trimmed as LA and Long Beach cargoes fall
A SCHEME designed to ease congestion at the ports of Los Angeles and Long Beach is to be scaled back because of shrinking cargo volumes. Terminal operators at the two ports have decided to reduce the number of dock gates kept open during offpeak hours. They will each eliminate one Thursday or one Saturday PierPass offpeak shift per week because of reduced traffic levels. The new schedule will start in the week of April 6. Under the PierPass programme, a fee is levied on containers collected or delivered during the day. The charge is waived for containers moving through the dock gates during less busy night time hours. “With the dramatic drop in cargo volume amid the economic crisis, terminal operators must take measures to reduce their operational costs,” PierPass participants said in a statement. The scheme has proved a considerable success, with about half the traffic now moving at night, while the opening hours of many warehouses and depots have been adjusted to match the extended dock gate times. However, volume was down 32% at the ports of Los Angeles and Long Beach in the fourth quarter of 2008 compared with same time period in 2007, and continues to decline. “We evaluated a range of options and consulted extensively with our stakeholders,” said PierPass president and chief executive Bruce Wargo. “The choice of eliminating either one Thursday or one Saturday off-peak shift per week gives each terminal operator the flexibility to determine which gate closure would be least disruptive to their customers and operations.” The drop in cargo volume has reduced the amount of money collected from the Traffic Mitigation Fee. In addition to providing a financial incentive to move cargo during the quieter periods, the fee is intended to cover the added cost of the five extra shifts per week. Since PierPass was introduced in 2005, revenue from the fee has not fully covered the higher overheads. In the fourth quarter of 2008, the actual cost of operating offpeak gates was $79 per teu, compared with the fee of $50 a teu. The programme was established four years ago to reduce congestion and air pollution in and around the two ports. All international container terminals established five new shifts per week, Monday through Thursday from 1800 hrs to 0300 hrs, and Saturday from 0800 hrs to 1800 hrs.
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