DECEMBER 10, 2015 Initial PierPass Review Shows No Red Flags, Continues

PierPass Inc. has been a lightening rod for criticism from cargo interests and truckers in Los Angeles-Long Beach for    an alleged lack of transparency in the funding of night and weekend gates, but an initial Federal Maritime Commission       review uncovered no glaring problems with the entity that manages the extended-gates program.


Commissioner William P. Doyle said  an  FMC team visited Southern California last week to view  PierPass’   books and     meet with terminal operators in the largest U.S. port complex. Doyle read the FMC briefing, and as of now, he told the       annual JOC Port Performance Conference Wednesday, “I’m not seeing something that’s bad.”


The FMC’s scrutiny of the PierPass model is significant because it comes at a time when other ports are considering       ways to extend gate hours in order to prevent truck congestion caused by cargo surges from large container ships.        Oakland filed with the FMC its plans for Saturday gate openings, and other ports such as New York-New Jersey are          grappling with truck congestion problems, and a program of regular extended gates is being considered. Doyle, along      with the four other FMC commissioners, will continue disussions regarding PierPass at a meeting Wednesday. 


PierPass, which was founded 10 years ago to address port traffic and pollution problems in Southern California, has        always been looked upon suspiciously by the trade community because it collects a traffic mitigation fee from cargo        interests that send their trucks to the harbor during the peak daytime hours. Revenues are used to reimburse terminal    operators for the cost of running four weeknight and one weekend day gate.


Beneficial cargo owners generally do not like the idea of having to pay a fee in order to fund the five extra gates each      week, but Doyle indicated that argument by itself is not convincing. “The fact is, if you are going to run off-peak gates,     someone has to pay for it,” he said.


BCOs and truckers charge that PierPass does not make public detailed records of how much it costs each of the 13       container terminal operators in Los Angeles-Long Beach to stay open for five extra shifts each week, so they can’t          determine if the traffic mitigation fee is generating more revenue than the terminals need to run the extended gates.


Doyle indicated that level of detail  may  not  be  forthcoming because certain   information  collected by outside auditors  hired by PierPass is considered in the terminal operating industry to be proprietary. However, information on the gross    amount of money collected by PierPass, and other operational data including salaries, was readily available.


As for possible areas of concern, Doyle said some BCOs are upset because all of the 13 terminals do not always stay      open for five weeknight nights  and a  weekend  day  gate, but rather some terminals offer ad-hoc gates  as  needed.        Truckers prefer continuity throughout the harbor, with all terminals being open during the same hours so that truckers     can serve all terminals and thereby complete more outbound and inbound moves each day. “Predictability is needed.        They’re working through that,” he said. “There’s always room for improvement.”


Oakland this summer  petitioned  the FMC  for  permission to develop a light version of PierPass known as OakPass.      Unlike Los Angeles-Long Beach, which handles more than 15 million 20-foot-equivalent units a year, Oakland handles      about 2 million TEUs. Oakland is beginning to outgrow the 40-hour Monday through Friday work week, but is not ready for a full schedule of five extra gates. The port authority and terminal operators determined that a full-day gate on Saturday should be enough for now.


Oakland is considering a fee to reimburse terminal operators for running the Saturday gates, but the shipper community in Northern California has concerns about that. The FMC therefore called for the submission of certain documentation to help commissioners perform their oversight functions.


The original filings by the port and terminal operators were not enough, in the FMC’s opinion, so the commission asked    Oakland for a new round of information. Doyle said that request triggered a new clock ticking for 45 days. He expects       the second  round of submissions should be completed in early 2016 and then a decision will be made.


Generally, BCOs and truckers at Port Performance who addressed port congestion problems around the country said     that for some ports traditional Monday-through-Friday weekday gates are not enough to handle growing cargo surges in relatively short windows, and they  advised  that ports consider  programs  for extended gate  hours.   The  FMC  could      therefore be asked to review plans by other ports to implement PierPass-type programs.


| Dec 10, 2015 8:42AM EST

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