Trucker turn times in Los Angeles-Long Beach are back to where they were in the spring of 2014 before the ports were crippled by labor slowdowns, but industry analyst Val Noronha is giving terminal operators in the largest U.S. port complex a grade of only D-minus.
“An argument can really be made that it should be an F,” said Noronha, president of Digital Geographic Research Corp., who has been analyzing truck turn times for the past five years using GPS technology.
Using the Metris index that Noronha developed to track truck turn times at the 13 container terminals in Los Angeles-Long Beach, the ports are back to where they were in late 2012 during the Office Clerical Union strike. The entire port complex, including the port authorities, the terminal operators and the drayage industry should not be satisfied with those results, he said Tuesday.
The past year was one of the most difficult ever for the Southern California ports. Terminal congestion began to increase in the spring of 2014 because of intermodal rail service issues, a severe chassis dislocation problem and an onslaught of mega-ships that created surges of 5,000 to more than 10,000 container moves per vessel call — more than at any other U.S. port.
Port conditions deteriorated beginning in November when the International Longshore and Warehouse Union slashed the daily dispatching of skilled yard crane operators by two-thirds and the Pacific Maritime Association retaliated by slashing night and weekend work. The index bottomed out below 30 during the strife.
These conditions, which were tied to negotiations for a coastwide labor contract, continued until a tentative agreement was reached on Feb. 20. It took the ports an additional three months to dig out of the backlogs of vessels at anchorage and containers stored on the docks, but by the end of May the ports were back to normal.
Noronha’s index hit 40 last month, which was an 11-month high and indicates that the labor issues are now history. However, a Metris reading of 40 is troubling to Noronha because he said an acceptable level should be about 50, and ideally for a port complex the size of Los Angeles-Long Beach, it should be 60 or higher to maintain consistent operational efficiency.
The Metris index measures truck turn times at marine terminals in a range from zero to 100. Zero would be worse than a third-world situation in which trucks show up at a port and are stuck there for days. On the other end of the scale, Noronha said Busan, South Korea, advertises 10-minute turn times, which would put it in the high 90s.
Since he has been measuring turn times in Southern California, the ports topped out at 64 in January 2011, Noronha said. Most truck turn times then were less than one hour for a single transaction and there were few outliers of two-hour turn times or greater.
Since then, container volumes increased steadily, ships got much larger, carriers expanded their presence in alliances, which cause logistical problems for the terminals, carriers stopped providing chassis to the truckers and container surges of 5,000 or more became commonplace because carriers in their Pacific Southwest services discharge and reload 80 to 90 percent of each vessel in Los Angeles-Long Beach.
The lengthy period of ILWU slowdowns and employer retaliation that began in November was an anomaly that should not be repeated during the remaining four years of the five-year contract that was ratified by the ILWU and the PMA in late May. Also, container growth has returned. The container volume in Los Angeles-Long Beach in March through May was up 7 percent over the same three-month period last year, according to PMA figures.
Therefore, the ports are back to where they should be in terms of labor productivity and container traffic, but the fact that the Metris index in June was only at 40, rather than at 60 or higher, indicates to Noronha that the ports are crying out for significant operational changes to improve gate productivity.
The port authorities are certainly taking bold steps to improve productivity, he said. A neutral chassis pool was launched on March 1, which has brought stability to the new chassis regime that is managed by the three largest chassis-leasing companies. The ports have unveiled a “peel off” program that block-stores containers that will be pulled by a single trucking company, which is improving turn times at the terminal where it has been tested. The ports have also identified near-dock sites where inbound containers can be drayed to as soon as they are discharged from the vessels, which should improve terminal fluidity.
Noronha said those measures are positive, but are producing only incremental gains. His research has identified specific times of the day when turn times regularly exceed two hours, and he said immediate action is needed to eliminate those roadblocks.
For example, many terminals shut down for the hour-long lunch break. Noronha said lunch breaks must be staggered so the gates remain open continuously throughout the day. “You don’t land a plane in St. Louis because the pilot has to eat lunch,” he said.
The worst time of the day in Los Angeles-Long Beach is the hour when the day shift ends at 5 p.m. and the night shift begins at 6 p.m. Under the PierPass extended gates program, a traffic mitigation fee is charged during the day shift to encourage more traffic during the night shift, when no fee is charged. Truckers queue up for an hour or longer at that time of day to wait for the fee-free night shift to begin. Noronha suggested changing the PierPass fee in a way that will make it unnecessary to queue up for an hour or longer.
These and other soft changes in operations at the ports would not be costly, at least compared to building more infrastructure, and can be implemented immediately. When those measures run their course due to continued growth in traffic, more costly steps such as implementing terminal automation and enhanced technology, or keeping terminals operating continuously round the clock will be needed, he said.
The ports are spending in total about $6 billion in infrastructure development in the coming years, but sitting back and waiting for these capital projects to be completed is not the answer to the immediate problem, Noronha said. “The evidence is very clear that this is not an infrastructure issue,” he said.
If the ports and terminal operators would study the Metris index from its beginnings until today, they would agree that a reading of 40 is totally unacceptable, Noronha said. “We need to believe that we should at least be in the 50 range or higher,” he said.