Port truck congestion the focus of Los Angeles FMC hearing

Stakeholders in the escalating port trucking congestion crisis gathered at an FMC-hosted public forum on “US Port Congestion” at the Port of Los Angeles. As AJOT West Coast correspondent Stas Margaronis observed at the packed hearing, there are “deep divisions” between the parties and real solutions remain elusive. But as FMC Commissioner Cordero reminded the forum, they’ve been down this road before and collectively found solutions to major problems. The FMC (Federal Maritime Commission) on September 12, 2014 held a public forum moderated by FMC commissioner Mario Cordero billed “US Port Congestion: Examining Causes, Impact of Stakeholders, and Exploring Possible Solutions” at the Port of Los Angeles Administrative Building. The location for the meeting couldn’t have been more appropriate as the San Pedro ports of LA and Long Beach have been the epicenter for port congestion on the West Coast. Over the past few years there has been a rising sense of frustration among the surrounding communities, trucking companies, logistics firms and importers and exporters, that what happens outside the terminal gates – generally highways that look like parking lots - is not being addressed by the ocean carriers, the terminals themselves and state and federal authorities. These issues are not unique to the West Coast and the FMC plans on holding a similar forum in Baltimore for tackling the Mid Atlantic and Northeast, but given the volumes involved, any real solution to the problem has to begin with the ports of LA and Long Beach. FMC chairman Mario Cordero opened the hearing by saying congestion is a problem at all US ports and that regional forums are being held to create a dialogue to help find solutions to the congestion issue. Cordero urged “a collaborative approach that doesn’t involve finger-pointing.” Cordero said the Ports of Long Beach and Los Angeles had already faced tough challenges ten years ago over freeway congestion and pollution. The ports solved those problems by establishing the Pier Pass program to encourage night time picks ups and deliveries which reduced day-time freeway congestion. The Ports Clean Truck program eliminated old, polluting trucks operating at the ports and improved air quality. Cordero noted, “The ports solved these problems with an optimism that we need again to address this congestion issue.”

Highway and Port Congestion There are deep divisions among the stakeholders as the comments to Commissioner Cordero reflected. Richard Navarro, VP West Coast, Toll Global Forwarding, expressed the frustration with the ongoing situation when he told the FMC hearing that he is concerned that congestion will not go away anytime soon. “It used to be that there was sporadic congestion now congestion is the norm. Terminals open and close gates based on how much volume they have and the truckers face the delays when this happens.” Navarro said the congestion issues were caused by a lack of coordination between terminal operating companies, ocean carriers, and chassis owners with the result that trucking companies and drivers must bear the brunt, “Nobody is telling the truth about what’s going on.” Navarro added “Drivers are having a harder time making money and they need to do better. I feel bad for my people all the time. Drivers need to do better but I just don’t see what we are going to do tomorrow.” Drayage truckers have long expressed the feeling that the terminal operators haven’t had their backs as issues of congestion, pay and general welfare continue to deteriorate. One driver testified that he went to pick up a container at noon and was delayed five hours. He was told the container was damaged and not shippable, “I am fifty three years old. My teeth are falling out. I have no benefits. I can’t afford to live like this.” However, Edward DeNike, president of SSA Containers, disputes this notion and says it was not true that terminal operators “don’t care about truckers. The problem is that we are all trying to survive.” DeNike said there is a dislocation between times drivers show up at terminals because they work later in the morning and leave work early in the evening. This creates problem for a longshore shift at the terminal that starts at eight in the morning and finds few drivers at the gates. The drivers show up later in the morning, “We have situations at eight in the morning where there aren’t many drivers and the same thing at eleven o’clock at night.” DeNike added, “Terminal operators cannot keep gates open when there is no business.” The dynamics of the waterfront trucking labor could be changing, which could have a big influence on the relationship between the terminal operators and drivers. Harbor truckers who were represented by the Teamsters Union said that they are winning legal recognition that they are employees and not owner operators and this means that drivers will be better paid. If they are forced to wait for hours for a container, customers may soon be paying the cost for these delays instead of shifting the burden on to drivers paid by the load and not by the hours. Chassis Issue DeNike has been particularly outspoken about the shortage of chassis at terminals. Since ocean carriers exited from chassis ownership, leasing companies have filled the gap by providing chassis to customers. In some extreme cases, the shortages are so bad, DeNike said “that we have had guards guarding the chassis because when a chassis does finally show up the drivers fight over who gets the chassis and we need the guards to intervene.” DeNike said that he has had to tell one ocean carrier not to bring its ship into port “because we have no chassis to load containers with.” There are other elements to the chassis issue as Bernard Vaughan, executive vice-president for Flexi-Van Leasing, pointed out at the meeting. Vaughan told the FMC that 5.5% of total chassis at the ports of Los Angeles and Long Beach are out of commission at any one time because of maintenance and repair issues. Vaughan says that his company has a shortage of qualified mechanics and the best ones take jobs at the ports and become members of the ILWU (International Longshore and Warehouse Union). He says the company lacks control over the chassis operation and is being challenged by larger ships loading and unloading larger container loads in which the repair problem mushrooms into larger and larger numbers. Ultimately, Vaughan is hoping closer cooperation between chassis lessors will create improved supply and fewer dislocations. Solutions Elusive With the myriad of problems associated with highway and port congestion, there are no quick fixes but the participants at the forum had opinions on solutions that could start the process down the right path. Alex Cherin, executive director of the HTA (Harbor Trucking Association), said that a survey taken by the association showed that 22% of all truckers have a wait of over two hours for containers. Cherin said that a matrix was necessary to enforce a standard on terminal operators and truckers and that a penalty ought to be assessed to ensure on time deliveries. Cherin supports terminals being open 24 hours a day seven days a week to provide truckers with more time to pick up and return containers. Cherin also followed up on the chassis issue. Noting, “Chassis availability is a serious concern and drivers sometimes arrive at terminals and find there is no chassis available for them to load a container.” Michael Johnson, president of the HTA, echoed Cherin on the assessment issue. He said advanced computer and hand-held systems can help truckers and terminals communicate before the trucks arrive at a terminal gate. Johnson said, “ILWU workers must embrace more training” to handle the increased electronics required to facilitate terminal gate transactions. Johnson said there needs to be more leadership by the ports on the congestion issue if a solution to the congestion issue is to be achieved. Incentives and penalties are necessary to solve the problems and improve performance. Bruce Wargo, president of PierPass, which administers night time operations for the Long Beach and Los Angeles ports said ‘free flow’ dispatching of containers to a shipper would deliver a number of containers for a group of drivers to pick up at the same time. When the containers arrive at the end user, the shipper can sort which container goes where. Currently, a trucker arriving for one specific container needs to wait sometimes while it is located. Wargo wondered whether proposals for a 24 hour terminal operation would work. He noted – as did DeNike- that there are times when there is little or no truck traffic at some terminal gates. Thus having terminal operators spend more money to open up more terminal gates might not be the answer at the ports of Long Beach and Los Angeles where 55% of truck trips occur at night. Wargo noted that 35% of trucks at Long Beach and Los Angeles do not make their gate appointments and that 5-7% of trucks do not have the correct paperwork and have to go back through the terminal gate a second time. He said a better pre approval system would anticipate these problems and reduce the number of ‘trouble tickets.’ A big challenge for everyone, Wargo said, is the larger container ships are creating peaks and valleys in flows of containers and these leaks and flows are causing disruptions throughout the container delivery system. Congresswoman Janice Hahn (D California) told participants at the hearing that she is sponsoring a bill in Congress to fund a National Freight Network Trust Fund. Based on a 5% assessment on all import duties the fund would generated $1.9 billion a year in new transportation investments that would include ports. She said the measure has support from Republicans and Democrats as well as the AAPA (American Association of Port Authorities).