To Our Valued Customers:
PierPass, a program which has helped delude cargo traffic congestion at the Ports of Los Angeles and Long Beach, has adapted its previous incentive-based model to an appointment-based one, requiring a Traffic Mitigation Fee (TMF) for all containers. Here is what you need to know:
What is PierPass?: PierPass is a nonprofit company created by the West Coast MTO Agreement (WCMTOA), a coalition of 12 marine terminal operators at the Ports of Los Angeles and Long Beach. In 2005, PierPass launched the OffPeak initiative, a program designed to address cargo-related issues of air quality and security arising from increasing congestion at the ports’ container terminals.
Instead of limiting all deliveries and pick-ups to a small window between 8:00 AM and 5:00 PM (Peak hours), OffPeak established weeknight and Saturday shifts (Non-Peak hours) between 6:00 PM and 3:00 AM on Monday through Friday, and 8:00 AM to 5:00 PM on Saturdays. To incentivize the use of these alternative shifts, PierPass charged a Traffic Mitigation Fee (TMF) of $72.09 per TEU during normal weekday hours.
What prompted PierPass?: Prior to the program’s conception in 2005, the ports were facing growing animosity from Southern California communities and politicians due to the high volume of idle trucks in the local areas surrounding the ports. 88% of containers were delivered to the ports by truck during the first shift of operations between 8:00 am and 5:00 pm. According to PierPass, during an average OffPeak weeknight shift in 2016, “15,000 trucks visited the ports. If all of these trucks were lined up bumper-to-bumper, they would form a line 160 miles long, stretching more than halfway to Las Vegas. Without the OffPeak program, this cargo would be crammed into a single day shift, doubling daytime volumes and once again causing severe congestion, leaving truck drivers stuck in hours-long jams.”
Revising the program: While OffPeak greatly mitigated the traffic issue, there arose new congestion concerns that had to be addressed. The overall volume of trucks was dispersed between the two shifts, but the incentive of forgoing the $72.09 TMF proved too appealing, and trucks would line up outside of the ports before 6:00 PM to avoid the fee. The problem that the WCMTOA was intending to remedy in the first place had simply shifted to a different time of day. As a response to this, PierPass recently amended the OffPeak program, culminating in OffPeak 2.0.
The new iteration of OffPeak, which went into effect on November 19, 2018, does away with Peak and Non-Peak hours and replaces the incentive-based pricing model with an appointment-based one requiring a flat Traffic Mitigation Fee (TMF) of $31.52 per TEU during daytime and nighttime shifts and $63.04 for all other container sizes. As far as appointments go, it depends on the terminal being used. However, almost all of the terminals will require appointments for all containers. This also goes for container pickups as well. PierPass asserts that the previous system was too inflexible and lacked the ability to evolve with changing industry practices and technology. “It has a lot of flexibility for terminals to evolve their systems and practices over time in response to customer needs, as new best practices emerge, and in response to competitive pressures,” the company said. The change was the outcome of an October 2016 workshop with more than 70 industry leaders and local officials.
The looming effects: It remains to be seen whether the new iteration of the program will yield the intended effect of reducing congestion, mitigating environmental consequences from the high volume of trucks and improving customer responsiveness at the ports. Weston LaBar, CEO of the Harbor Trucking Association, maintains that the change is a step in the right direction. “This new direction for PierPass is another example of cross-industry collaboration,” he said. “It shows that the San Pedro Bay Port Complex will continue to be the preferred gateway for moving America’s cargo.”
We are here to help! We are working with all of you to help navigate this as seamlessly as possible. Should you need any additional information or assistance, please feel free to contact your Laufer sales or CHB customer support personnel. Thank you very much for all your support.