Volume is up but congestion is lowerBy Peter A. Buxbaum, AJOTA recently-released analysis from the National Retail Federation presents some interesting facts about Southern California ports. Volumes of containers flowing through the ports in July 2006, the most recent month for which statistics are available, top those of October 2005, the peak month in last year’s holiday shipping season. And yet, the port’s congestion levels were rated “low.” What does all this say about Southern California ports? Simply this: that they are processing more import cargo than ever and that they are handling those imports without repeating the collapse of 2004, when they were handling much lower volumes. “It’s a success story,” said Paul Bingham, an economist with the analysis firm Global Insight, which studies the ports on behalf of the NRF. “The Port of Los Angeles and Long Beach have taken steps to make sure they did not repeat failures of two years ago.” NRF commissioned Global Insight in the summer of 2005 to analyze short-term and long-term prospects for port congestion in order to aid retailing importers. The organization issues a newsletter, and has developed a forecasting model that assesses the conditions of ports and inland transportation networks. “The growth level in container traffic this year is higher than last,” said Bingham. “The collective community made up of steamship lines, terminal operators, ILWU labor, rail freight carriers, dray truck drivers, shippers, and third-party logistics providers all came together to make it happen.” A variety of measures were taken to make the ports more efficient and to help move containers out of the ports inland. “Ocean carriers added capacity into Southern California ports,” Bingham noted. “This came about partly by adding larger ships to their fleets, but they had to have the confidence that they could meet schedules and not have their ships out at anchor to place the newer ships in these service strings.” The most significant innovation at the Southern California ports, however, was the introduction last year of the PierPass program which added five extra shifts per week to port work schedules and which shifted a significant level of cargo to off-peak hours. “This allows dray truckers more time to pick up containers and intermodal rail yards and Southern California distribution centers to receive them,” Bingham explained. “The containers are spread out over the highway network over a longer period of time, especially during the evening hours, when there is less competition with passenger traffic.” Bingham estimates that 30% of containers that are moved off port gates by highway have been shifted to off-peak hours. “This has smoothed the entire operation in Southern California,” he said. Among other measures taken by members of the port community, some shippers have extended their distribution center hours of operation to match those of the extended gate hours. “That way they can receive containerized cargo other than between 8:00 AM and 5:00 PM on weekdays,” Bingham explained. “It also allows dray truck drivers to achieve more turns per shift.” Rail efficienciesRailroads have also contributed by investing in additional equipment, expanded yard capacity, and additional manpower. “They have expanded the workforce trained to work on intermodal trains and have increased the number of intermodal trains they run,” Bingham said. “They have substantially increased numbers of available intermodal rail cars and locomotives.” Rail carriers have also instituted efficiencies in the form of a rationalization of some of their rail yards, according to Bingham, by segmenting international trains from domestic intermodal trains. Because domestic and international containers differ in length, as do the rail cars which carry them, segregating cargo in this way allows the railroads to move more boxes with the same train length. Shippers’ reactions to being instructed by carriers to deliver their shipments to domesti