From our commentary of November 12th, 2004:
“Because of cargo delays, traffic congestion, air pollution and a shortage of longshore workers, the marine terminal operators’ group in LA/Long Beach, known as PierPass, Inc., proposed to initiate a program calling for extended hours … PierPass proposed to impose a fee, or a fine, of $ 20 per TEU on any importer or exporter who preferred to move cargo during the hours of 8 a.m and 5 p.m. The program was to go into effect on November 1st …
“Time to do some more math. PierPass, Inc. proposes to collect the fees and administer the program, and along with an advisory committee from the shipper and transportation community, PierPass will evaluate the program to determine if the fees being collected cover the true costs incurred by terminal operators for running extended gates. Here’s where it gets tricky. More truckers conforming produce less fees, right? More truckers conforming require more gates, right? More gates in operation require more money, right? So where’s the money for the increasing cost of gate operations coming from if fewer fees are being collected from truckers?
“The terms “helter-skelter”, “willy-nilly”, topsy-turvy”, “herky-jerky”, all come to mind when flip-flops (there’s another one) are executed. What sounded like a good idea in this crisis is just another unworkable stop-gap measure. Owner-operators will resent being herded like cows, and Mr. Belzer made that perfectly clear when he characterized the present working conditions as “sweatshops”.
“Back to the drawing board.”
As expected, drawing board consultations lead to tweaks, tweaks, and even more tweaks. In PierPass’ case, these consultations resulted in postponements, eventual reliance upon an out-of-state IT firm, gradual upward adjustments in fees, and ultimately, the “surveys” of selected participants in order to demonstrate the acceptance of the initiative. For example, 71 percent of the drivers who responded to the most recent survey, the one conducted in May of this year, said “the extended gates have resulted in reduced traffic on the I-710 and I-110 freeways in the harbor area. About 55 percent of the respondents said PierPass has helped to reduce congestion within the marine terminals”. It looked good on paper but only 480 drivers responded to that survey. One was inclined to wonder, or surmise, what the other 10,000 or so drivers were thinking … or why they failed to respond. If they were asked to reply and they elected to let their silence be their response, then the initiative would certainly require further adjustments. Of course, maybe they weren’t asked to respond. Either way, it appeared as though we hadn’t seen the last of the adjustments.
Well we didn’t have to wait very long. Since the results of that May survey were revealed we’ve begun to hear rumblings about the reluctance of shippers to handle the $ 50 per TEU penalties promptly. Think PierPass will conduct a survey on that matter? Don’t hold your breath.
[Oh, yes. We forgot to mention it, but it’s $ 50 per TEU now and not the originally proposed $ 20.]