Changes to LA/LB Pier Pass Program

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Changes to LA/LB Pier Pass Program



Changes to LA/LB Pier Pass Program

Many of our customers move product through the largest port in the country, Los Angeles/Long Beach, and have experienced the major congestion problems at the marine terminals and the highways in the greater Los Angeles area. The Pier Pass program, started in 2005, sought to address this issue by extending gate hours and charging a fee only for picking or dropping containers during normal business hours.

West Coast marine terminal operators have announced their intention to change this program by reducing the fee but charging it for ALL containers regardless of the time of day they are moved. Pier Pass 2.0 is scheduled to start on November 19th, unless the FMC blocks it.

The original version was successful because about 50% of containers were moving after hours and only those willing to pay more (or unable to process after hour moves) would send trucks to the terminals during normal business hours. Those who had the ability and capacity to pay for late/weekend hour deliveries or loadings were able to avoid a processing fee at the terminals.

The new rule will require all parties to pay the fee and there are concerns that those formerly not paying any charges will be disadvantaged. Another perspective is that now all shippers will be paying their fair share to avoid minimize congestion but may have to participate in the after hours gate extension. Could this lead to all companies sending trucks during the weekdays to avoid extra shifts/OT at their plants or warehouses? Hopefully not but it will now put a premium on what time appointments will be made since all LA/LB marine terminals will have an appointment system. The system will not accommodate all this traffic moving to weekday/daylight hours so something has to give.

Currently shippers pay currently $72.09 per TEU or $144.18 per FEU for moving containers during day-light weekday hours. As of November 19th all shippers will pay $31.52 per TEU, or $63.04 per FEU or larger. Terminal operators will use the appointments to manage truck traffic.

The FMC has until Nov. 19 to either do nothing, which will allow the proposed flat-fee model to take effect, or take regulatory action to prevent implementation. Many shippers feel there is no reason to change a system that was working. We will keep you advised on further developments but in the meantime we all need to prepare for the new system and get a clear understanding on how the appointment system(s) will work. NOTE: Many other ports are watching these events unfold in LA/LB and considering implementing similar systems. We will keep you advised.