Initial results for OffPeak program appear promising

PierPass reports that more than half a million truck trips have been diverted from peak daytime traffic hours since July 23.

By Susan Lacefield, Associate Editor -- Logistics Management, 11/1/2005

LONG BEACH, Calif.— When PierPass introduced its OffPeak program earlier this year, it met with controversy and skepticism from shippers and transportation providers alike. (See Shippers plan to avoid PierPass fees by diverting cargo, July 2005, and Circumnavigating the choke points, October 2005.) But after just two months, the program is seeing signs of success.

PierPass, the non-profit group formed by marine terminal operators in Los Angeles and Long Beach to reduce traffic congestion around those ports, reports that more than half a million truck trips to and from the ports have been diverted from peak daytime traffic hours since the OffPeak program began on July 23.

To help shift cargo movement to nights and weekends, the ports established five new shifts per week for all international container terminals and started charging a "traffic mitigation fee" of $40 per 20-foot container and $80 per 40-foot container for cargo movements during peak hours. Those hours are defined as 3 a.m. to 6 p.m., Monday through Friday. (Details of the program are available at www.pierpass.org.)

With more than 503,000 truck trips taking place during off-peak hours between July 23 and Oct. 1, the group says, the program reached its two-year goal of moving approximately 34 percent of the ports' traffic at off-peak hours in just two months.

According to Mark Johnson, vice president of marine terminal operator SSA Marine and a member of the PierPass Outreach Committee, the program's early success exceeded all expectations. The original aim was to shift 15 to 20 percent of all cargo movements to off-peak hours by the end of the first year of operation and 30 to 35 percent by the end of the second year. "I think one of the reasons for that [success] is the traffic mitigation fee," says Johnson. "It's a classic example of the container moving to where it's treated most favorably."

To make the program work, participating shippers have had to adjust their operations as well, says John Amos, chairman of the National Industrial Transportation League's Ocean Transportation Committee and president of the consulting firm Amos Logistics. "The key driver has been the fact that importers have worked out agreements to open their warehouses and facilities to receive containers at night. It would never work without that," he says. Importers that now keep their warehouses open at night have had to adjust their labor contracts to allow employees to work more swing shifts, Amos adds.

The OffPeak program still has some wrinkles to iron out, however. A survey conducted by the California Trucking Association of 365 drayage drivers working for 116 motor carriers found that drivers' opinions of the program are mixed. Some 43 percent of respondents had a negative view of the program, 27 percent had a positive view, and 30 percent were undecided. Responses to the survey may indicate that drivers are seeing the same types of inefficiencies and delays during nighttime operations that plague some terminals during the normal workday.

Johnson acknowledges the need for more outreach. "We need to continue to educate the cargo interests and drivers about the best times to come to port," he says. "If you're down there at 10:30 or 11 at night, you can get in and out at a lot of different times. If you're there at 6:15 and everyone else is trying to get in extra moves after they've done their afternoon moves, there's going to be more congestion."

Some drivers have expressed concern with equipment turn times during off-peak hours. According to Johnson, PierPass and its member marine terminal operators are working to speed up turn times. Another issue, Johnson says, is that shippers need to look at compensating drivers appropriately for late-night moves.

Overall, though, port stakeholders appear to benefit from the program. "Today we're seeing all of the players cooperating more," says Amos. "Importers are working more with their ocean carriers because they realize that every little bit helps speed the process. PierPass is just another element helping to move things along."