Currently the off-peak program encourages cargo owners to pull containers during off-peak hours at night and on weekends to reduce congestion in and around the terminals as well as reduce pollution during peak day time hours. Containers pulled from the terminals during daytime peak hours are subject to a $50/20′ and $100/40′ fee. By pulling containers at night, cargo owners avoid this fee. While I’m fairly critical of any program that increases costs to cargo owners and reduces the competitiveness of ports and terminals, there’s no arguing that this program has been a success in reducing the number of trucks moving in and out of the terminals during peak daytime hours. This in turn reduces truck traffic on local roads and freeways, shortens overall wait times and turnaround times, and, hopefully, improves the daytime air quality around the port. According to the PierPass website, a total of 5 million trucks have been diverted from daytime traffic since the start of the program in July 2005. Their home page even includes glowing endorsements, on a rotating basis, from Los Angeles Mayor Antonio Villaraigosa, Long Beach Mayor Bob Foster, and Senator Barbara Boxer.

So I was quite surprised to read this article over at Logistics Management that states that the Los Angeles Harbor Commission is discussing the possibility of ending the off-peak PierPass program:

But harbor commissioners don’t see it that way, stating at their meeting late last week that the “night gate” program that encourages truckers to call terminals at off-peak hours should be dismantled.

With Commissioner Joe Radisich leading the charge, port staff is being asked to report back to the commission in May on whether the PierPass OffPeak program is still viable.

According to analysts, the commissioner’s rationale may be that container taxes soon to be imposed on shippers will pay for “greener” trucks in the future. Currently, the port collects a $50-per-TEU (Twenty-foot equivalent units) fee on daytime container moves to support the labor costs of keeping gates open at night and on weekends.

“The commission has been pointing to numbers suggesting less cargo is coming through the port,” said Palazzolo, “but that’s short-term thinking. When throughput ramps up again, the community is going to be faced with the same pollution problems and concerns.”

He added that the threat of community-based lawsuits was also a risk.

If the Port Commissioners continue to make boneheaded decisions that make the Port less competitive they might see their share of container volume in the future decrease, not increase, once the economy heats up again.

While on the one hand I can’t say that I am a fan of the cost increase to cargo owners that move containers during the daytime - not to mention the disruption to truckers’ life schedules for having to move containers late at night and early morning - on the other hand it’s plain to see the benefits that this program has brought to the area in terms of congestion, increased efficiencies/turnarounds, reduced traffic on local roads, and air pollution. It seems odd that a program so universally applauded by major local political figures, not to mention the terminals themselves (who created PierPass) would even be considered to be shut down, much less by the people appointed by the City of Los Angeles to run the port.

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