By George Cunningham
Even in the best of times, it's not easy being in the port drayage industry. When times turn bad and even when they start to turn good again, it can be even tougher. Especially if you have your money tied up in trucks that spend much of their day waiting in line and using drivers who are barely making ends meet. In port drayage, you are the first to feel the pain, but the last to enjoy the fruits of recovery. That's why the business attracts so many tough, independent-type entrepreneurs - quick to speak their minds, but often just as quickly dismissed by more powerful players in the industry. Other supply-chain partners may be sympathetic, but they all have their own problems to solve and their own houses to set in order first.
What the port drayage folks are speaking out about now is what they see as impending gridlock at the Port of Los Angeles and Port of Long Beach. They are telling their customers, they are telling the press, and they are telling the public that unless something drastic is done and soon, the Southern California port complex may descend into the same kind of meltdown it did in 1997, when the Union Pacific merged with the Southern Pacific, again in 2002, when the Pacific Maritime Association locked the International Longshore and Warehouse Union off the docks, and yet again in 2004, when nobody anticipated a surge of goods from China, and the ports and railroads were caught unprepared.
The message from the folks who dray the cargo in and out of the port is not a popular one. It's taken six years to repair the port's tattered reputation from the last G-word (gridlock) or M-word (meltdown) and the last thing anybody needs is a group of trucking cowboys running around telling everybody it's about to happen again. But that cowboy talk does seem to get results.
The terminal operators announced Wednesday that they will form a working group of stakeholders, chaired by PierPass President Bruce Wargo, to address the problems. Both the Port of Los Angeles and Port of Long Beach have separately committed to help facilitate that discussion. The one thing everybody seems to agree on is that communication is good. Whether talking things over or even changing some terminal or port processes will be enough to make the drayage folks happy is another thing. There are powerful economic forces at work that have helped put the drayage industry in a bind.
Terminal operators and shipping lines are quick to point out that they suffered as much as anybody during the economic crisis - $11 billion to $20 billion in losses, according to whom you speak - which only this year seems to be finally coming to an end. In order to survive, they cut costs - for terminal operators and the International Longshore and Warehouse Union workers who supply the muscle to move the cargo in and around the terminal that translated to hours of work.
The terminals did away with one PierPass Off-Peak night shift and hired only enough longshore labor to keep the terminals open and the reduced amount of cargo flowing through them.
Things began to turn around at the beginning of the year as cargo volumes began to rise sharply after more than 18 months of decline. Although containers coming through the port are still far below the peak volumes of 2006 and 2007, the recovery seems to be real.
Wargo, who represents West Coast marine terminal operators, says the terminal operators are once again starting to spend money to boost service. They are adding flex gates - which means they are starting to staff the terminal gates at 6 a.m. instead of 7, opening them for the night shift at 5 p.m. instead of 6, and not closing down for lunch. Some are adding back the extra shifts cut from the PierPass schedule and planning to institute mandatory appointment systems in order to avoid trucks bunching up at the gates.
Although there are often long lines at the gates, they seem to happen at certain times of the day as truckers come to pick up their first load in the morning, again after the noon break, and also at the shift change. Because of the $100 per 40-foot container PierPass fee on cargo picked up during regular business hours, about 55 percent of the cargo moving by truck now moves in the evening and on Saturdays.
Wargo says that the 8 a.m. truck jam is usually cleared by 9:30 a.m. and that the 1 p.m. jam is gone by 2. The average inside-the-terminal turn-time - as measured by computers from entrance to exit - is about 45 minutes, Wargo says. But that does not include the wait in line on the street outside the gate or work-break times inside the terminal.
A quick check of Long Beach container terminals by port security officers on a recent Monday morning found no trucks lined up at four of the six terminals at either 10 or 11 a.m. One of the remaining terminals had 12 trucks in line at 10 a.m., but none at 11; the other had no trucks at 10 a.m., but 25 at 11.
One of the things that has changed is that before the ports implemented clean truck programs, truckers used to drive around in $12,000 trucks, sometimes working full time and other times working only part time. Now they are driving around in $100,000 trucks and have to move as many containers as possible to pay for their truck and have something left over for themselves. There used to be 16,000 trucks serving container terminals at the two ports, now there is about half that number.
That means that time in line becomes more important. So do other practices that drive the drivers up the wall - such as having to turn in a container at one terminal and the chassis at another or waiting for equipment to be repaired before it can be taken out on the road.
Communication may be good, but it does not solve all problems. However, if it can keep the parties engaged and ironing out their differences and help head off possible gridlock or even the perception of gridlock, then it may be well worth the effort.
-- The Cunningham Report
