Extended Gate Operations at the Ports of Los Angeles and Long Beach: A Preliminary Assessment of Pie

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Extended Gate Operations at the Ports of Los
Angeles and Long Beach A Preliminary Assessment
of PierPass

• Transportation Research Board
• January 24, 2007
• Genevieve Giuliano
• University of Southern California
• Thomas OBrien
• California State University, Long Beach

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What is PierPass?

• Extends marine terminal operations in LA/Long
  Beach beyond 9-5 adds second shift (6 PM-3AM)
  M-Th and Sat gate (8 AM-6 PM)
• Imposes TMF for gate moves occurring during peak
  hours
• First fee in US imposed to smooth out landside
  cargo flow

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Why PierPass?Growth in International Trade
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Why PierPass?Growth in International Trade
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Why PierPass?Increased Public Awareness
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Why PierPass? Increased Public Awareness
SCAG 2005 State of the Region
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Why PierPass? Capacity Constraints
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Why PierPass? Legislative and Environmental
Pressures

• AB 2650 passed in 2002 first attempt to
  encourage changes in operating hours at ports by
  regulating truck queuing outside of gates
• AB 2041 introduced in 2004 required extended
  gates and established Port Congestion Management
  District
• Local opposition to BNSF off-dock rail project
• SCAG elasticity study (container fee for
  infrastructure)

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Why did it take so long?

• Regulation via zoning and traffic controls
• Extended gate hours discussed for more than a
  decade
• Extended gate hours too costly
• Dock labor works in shifts, gangs
• Shift differential pay
• Costs of operating dock equipment
• Costs of ground operations, full service
• Not enough demand to support extra shifts
• Restrictions on cargo delivery
• Lack of safe cargo storage options
• Possible shortage of truck drivers
• Increasing business and no serious dockside
  capacity constraints (until 2004 peak season)

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PierPass Timeline

• Feb. 2004 AB 2041 introduced
• June 2004 MTOs file amendment to West Coast
  Marine Terminal Operator Agreement
• August 2004 FMC allows amendment to become
  effective
• August 2004 MTOs establish PierPass, Inc.
• July 2005 First off-peak gate

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PierPass Provisions

• Fee of 40/TEU for all road cargo
  entering/exiting during peak hours (50/TEU as of
  4/06)
• Peak hours M-F 3 AM 6 PM
• Exemptions Empty returns, chassis returns,
  domestic freight, transshipments to other ports,
  container cargo subject to ACTA fee
• System operated by PierPass registration
  required
• Net revenues allocated to terminals to offset
  costs
• 3-year sunset

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Methodology

• Analysis of PierPass data August 05-Sep 06
• Interviews with MTOs
• Interviews with other key stakeholders
• Review of trucking surveys
• Traffic Volume and CHP data (in progress)

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Implementation and Outcomes
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Implementation and Outcomes Terminal Operator
Response

• Only 1 terminal operated regularly on an extended
  schedule before PierPass
• PierPass adopted in response to AB 2041 (primary)
  and congestion (secondary)
• Need for information firewall
• Shift to off-peak met or exceeded expectations
• Benefit to industry no sunset
• Problems Off-peak 6-10 PM Queuing before
  off-peak gates start
• Not a model (lack of capacity constraints)

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Implementation and Outcomes Other Stakeholder
Response

• Not everyone at table
• Greater impacts for DCs, exporters, etc. because
  no TMF
• Local political leaders
• Taking credit for promoting change
• General public
• Reports of more congestion in late PM peak
• Truck traffic impacts extended across more hours
• Questions re environmental benefits
• ILWU
• Benefits re jobs asking for outside audit re
  program costs
• Not a model

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Implementation and Outcomes Trucker Response
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Explaining outcomes

• Motivation for MTOs
• Threat of regulation provides incentive for sound
  business decision
• Without changes in business practices, no
  credible case for public infrastructure
  investment
• Institutional relationships explain program
  structure, winners and losers
• MTOs and allied interests control the program and
  the fees are essentially guaranteed against
  financial losses
• Added costs passed on to other parties
  consignees and truckers

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Explaining outcomes

• Cost factors associated with extended hours on
  landside most important determinant of scheduling
  cargo moves
• Significant impacts on port drayage extended
  work week with limited increase in wages
• PierPass response to unique conditions other
  ports still looking to take advantage of TMF

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Policy Implications

• PierPass sets precedent
• Oakland, Vancouver
• New level of responsibility for ports to mitigate
  impacts
• Link between fee and mitigation outside ports
• PierPassing the rail
• Legislation follows congestion on the
  transportation system

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Thank you

• Contact information
• giuliano_at_usc.edu
• tobrien_at_csulb.edu
• www.metrans.org