Today I voted not to challenge an amendment to the West Coast MTO Agreement that will allow PierPass to only charge its Traffic Mitigation Fee during peak hours between 7:00 AM and 5:59 PM at the Ports of Los Angeles and Long Beach (LA/LB). This amendment properly shifts the Traffic Mitigation Fee to incent the movement of cargo to off peak night hours when general traffic congestion eases. The duration of the amendment is only a temporary period of two months, which I can support since it will allow time for an assessment of how effective the measure has been in driving terminal operations to a 24 hour/7 day a week basis (24/7). The actual success of this amendment to the agreement will depend on whether and how quickly other members of the supply chain can shift their operations to off-peak gates.
While I support this temporary measure, I believe that more aggressive action will be needed in the future. I question whether the amendment will go far enough to truly maximize the potential usage of terminal operations on a 24/7 basis. The Biden Administration sent a clear message by proposing 24/7 gate operations, but for a 24/7 or off-peak gate hours program to be successful, it means that all supply chain partners need to be rowing in the same direction.
I also question whether an opportunity to amend the appointment system was lost. The current appointment system has not been successful in ensuring that appointments will be kept. Each terminal operates its own system, and this balkanization impacts the effectiveness of the appointment process. The industry should explore how to strengthen this program.
There are many challenges to be faced when considering current operational issues at the LA/LB ports complex, but it is clear to all that this entry point is a vital artery in our Nation’s economic engine. LA/LB recently announced a super demurrage fee to incent cargo owners to pick up cargo that had excessively been kept at marine terminals, and while the Federal Maritime Commission staff has been in dialogue on specifics of application of the fee, there is evidence that the proposal itself has caused cargo to be picked up. Additional actions are being planned to address a growing build-up of empty containers and identifying temporary off-site storage options to allow the shipping complex to handle the backlog of over 90 ships waiting for berth space.
The Ports of Los Angeles and Long Beach have reported increases of 26.5% and 21%, respectively, over 2020 containerized shipping volumes. Shipping experts widely agree that as a result of congestion, we have lost potentially upwards of 15% of total containerized shipping capacity. These twin factors are driving continued delays and are contributing to national economic consequences. It is an incredibly difficult challenge to overcome these factors in an infrastructure confined area, which is why we need this LA/LB port complex to work with maximum efficiency. While I commend the marine terminals for taking the first step to truly incent nighttime moves at LA/LB, more can and should be done.
Carl W. Bentzel is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.