Saturday OffPeak Shift Dropped at LA

(Continued)

Container volumes at the ports of Los Angeles and Long Beach dropped 19% in October and November 2008 when compared with the prior-year period. The terminal operators pointed out the Saturday labor costs are 1.5 times the base rate vs. nigh shift labor rates of 1.33 times the base rate. “With the drop in cargo volume, terminal operators must reduce their operational costs,” said Bruce Wargo, PierPASS president and CEO. “When economic activity rebounds and cargo volume growth resumes, we will evaluate whether to reinstate the Saturday shift.”

Wargo noted that there continues to be significant unused capacity during the second half of the night shift on weekdays.

The OffPeak program was established in 2005 to reduce congestion and air pollution in and around the Los Angeles and Long Beach ports. Under the program, all international container terminals in the two ports established five new shifts per week (Monday through Thursday from 6 p.m. to 3 a.m. and Saturday from 8 a.m. to 6 p.m.). As an incentive to use the new OffPeak shifts and to cover the added cost of the shifts, a Traffic Mitigation Fee (“TMF”) is required for most cargo movement during peak hours (Monday through Friday, 3 a.m. to 6 p.m.). The program is administered by PierPASS, a not-for-profit company created by marine terminal operators at the ports to address multi-terminal issues such as congestion, security and air quality.

The marine terminal operators, through an independent consultant, are analyzing the current costs for the OffPeak program, assessing current traffic patterns and volume and the impact of ending the Saturday shift. The evaluation is scheduled to be completed in January 2009. The terminal operators will then determine whether any modification to the TMF is warranted.