The popular PierPass program giving shippers incentives to move cargo at off-peak hours through Southern California ports may no longer be justified.
The popular PierPass program giving shippers incentives to move cargo at off-peak hours through Southern California ports may no longer be justified because of reduced cargo volumes, the U.S. head of NYK Line said Monday.
?Right now, we need to take a new look at what we are doing, in terms of whether it still makes sense to have those night gates, NYK Line (Americas) Executive Vice President Peter Keller told the National Retail Federation annual conference.
He said the program, launched in 2005 to cope with congestion at the ports of Los Angeles and Long Beach, has spread cargo movements to nights and weekends, reducing truck congestion at the nation's largest container gateway. Created by terminal operators including NYK Line subsidiary Yusen Terminals, the program offering discounts for goods moved outside the crowded daytime hours has been popular with shippers.
But terminals say they are getting enoiugh money from the PierPass fee to cover the cost of night and weekend operations, and shippers and truckers recently complained when PierPass dropped some gate coverage, forcing them to move goods during the day and pay higher daytime fees.
Keller said a bigger change is needed because terminal operators are now coping with the higher costs of keeping gates open with diminished freight volume.
?Pierpass was something we started for all the right reasons, and with the deterioration of volumes there is significant capacity on the day side to handle the business,? he said. ?The issue is that it has been institutaionlized and many shippers now prefer the night gates. Now it"s a cost issue.
?We have fully manned day shifts, we are also paying excessive amounts of overtime to man the Pier pass gates. Right now we need to take a new look at what we are doing, in terms of whether it still makes sense to have those night gates,? Keller said.