One shift per week cut from extended gate program as container volumes drop

Terminal operators at the ports of Los Angeles and Long Beach will eliminate one shift per week
under the popular PierPass extended gates program, starting the week of April 6.

A “precipitous” decline in cargo volumes is forcing terminal operators to cut costs, said PierPass
President Bruce Wargo.
After consulting with their customers, seven terminal operators chose to eliminate the Thursday
day gate while six terminal operators will close their gates on Saturdays, Wargo said.

“The choice of eliminating either one Thursday or one Saturday off-peak shift per week gives
each terminal operator the flexibility to determine which off-peak gates closure would be least
disruptive to their customers and operations,” he said.

The PierPass extended gates program began in 2005 in response to severe terminal congestion
at the ports of Los Angeles and Long Beach. The program, which offers four night gates and one
Saturday day gate each week at the harbor’s 13 container terminals, has been a major
contributor to eliminating congestion at the ports.
“There is no congestion now,” Wargo said.

That’s not just due to the success of the program. The decline in container volume has also
helped eliminate congestion. Volumes at the port complex dropped 32 percent in the fourth
quarter last year, and the decline has been even steeper this year.

As a result, the cost of running extra gates has gone up. It costs terminals $79 per-TEU to run an
additional shift, but the PierPass fee that terminals collect is only $50 per-TEU.
Rather than increase the fee to cover their costs, terminal operators decided it would be easier on
their customers to reduce the costs of the program by eliminating one off-peak gate each week,
Wargo said.

At first, PierPass considered eliminating the Saturday day gate, which is the costliest for terminal
operators based on the longshore wage scale. However, a number of motor carriers and shippers
said Saturday was the most productive extended gate. Seven terminals therefore decided to
close on Thursday nights.

However, other customers told terminal operators they preferred the weekday gates, so six
terminals decided to remain open on Thursday nights but they will close on Saturdays. PierPass
soon will publish a schedule of all terminal openings and closures.

To demonstrate how traffic has fallen off during the current recession, Wargo said Saturday gate
moves now total about 9,000, down from almost 14,000 when cargo volumes were stronger.