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    LB & L.A. Port Terminal Operators Announce "PierPass" In Effort to Shift Portion of Truck Traffic To Night & Weekend Hours

    (August 23, 2004) -- In what one harbor area executive called "a massive shift in the way terminals will operate in Southern California," the Marine Terminal Operators at the Ports of LB and L.A. -- the nation's largest port complex -- on August 23 unveiled "PierPass," a private-sector plan to shift a significant portion of port-related truck traffic to night and weekend hours.

    "PierPass is an unprecedented program designed to improve traffic congestion and reduce air pollution near the ports of Long Beach and Los Angeles," said a release distributed by the Pacific Merchant Shipping Association (PMSA).

    The release describes the "Pier Pass" plan as follows:

    To provide incentives for cargo owners to move containers during off-peak hours and to defray the cost of significantly increasing the capacity of terminal operations, a Traffic Mitigation Fee will be assessed on all loaded international cargo containers. Cargo moving during off-peak hours or using the Alameda Corridor rail service will be entitled to a refund of the fee. A newly created special purpose entity known as PierPass, Inc., will administer the program and will determine the ultimate amount of the fee to ensure that it matches the incremental costs of the program. PierPass staff said the initial Traffic Mitigation Fee will be $20 per TEU. The amount of the fee will be subject to quarterly review and adjustment to reflect the actual cost of the program and the amount of the refunds.

    The Traffic Mitigation Fee will be used to offset the additional costs required to staff weekend and night operations, estimated to be more than $150 million annually. The program is expected to be phased in beginning on or about November 1, subject to the availability of trained labor.

    Because it will duplicate the capacity of services now provided during weekday terminal operations, PierPass should facilitate a shift of a significant volume of truck-borne cargo to off-peak hours. In addition to reducing daytime truck traffic on area roads and freeways, PierPass also should reduce air pollution generated by idling trucks.

    "'PierPass'" responds to community concerns by providing port-wide, full-service operations on weekends and evenings when trucks will not compete with commuter traffic," said the release, effectively acknowledging that it was a private-sector to legislation (AB 2041) proposed by Assemblyman Alan Lowenthal (D., LB-SP-PV) that sought to establish a "Port Congestion Management District ("PCMD") as a local government entity and require a fee from shippers who order pickup from ports between 8 a.m. and 5 p.m...thus inducing a shift of heavy-duty port traffic from daylight to nighttime hours and weekends.

    The PMSA opposed AB 2041, contending (as described in a June state Senate legislative analysis) that it was unnecessary and potentially harmful government interference in a s situation better left to efforts of the market-driven private sector.

    The same legislative analysis indicated that Assemblyman Lowenthal said he'd introduced this bill in order to spur and encourage action by the involved parties at the ports to move the transportation of cargo material increasingly to off-peak hours in order to significantly reduce vehicular traffic during the daylight hours, and he intends not to advance the measure "if the private sector devises a similar realistic proposal to move truck traffic to off-peak hours."

    On August 23, Assemblyman Lowenthal's Sacramento office confirmed to that in view of the "Pier Pass" program, AB 2041 will now be withdrawn.

    In announcing the "Pier Pass" program, the release quotes Assemblyman Lowenthal as saying much remains to be done to ensure the success of night and weekend operations. "Iím very pleased the terminal operators have done their part to remain open during the nights and weekends. We now have to work together to encourage the rest of the important links in the international trade supply chain to make full use of these facilities."

    The release also quotes L.A. City Councilwoman Janice Hahn (who represents the San Pedro area) as saying, "I am so pleased that the Marine Terminal Operators have decided to take the recommendations of our Regional Goods Movement Efficiency Team, as well as the proposals in Assemblymember Lowenthal's bill, and create a program to move goods during the nights and the weekends. Air quality in the harbor area continues to suffer and traffic congestion on the roads and highways throughout Los Angeles continues to worsen. The only immediate solution to these growing problems is to extend gate hours at our ports so that trucks can travel during off-peak hours."

    In June 2004, the South Coast Air Quality Management District (AQMD) Legislative Committee voted to support AB 2041, but with amendments to ensure that (among other things) congestion relief projects would be developed with AQMD or CARB and achieve an air quality benefit...and would be prioritized in environmental justice areas. With AB 2041 now withdrawn, there's no assurance these steps will occur.

    However, AB 2042 -- authored by Assemblyman Lowenthal and opposed by PMSA -- would provide some assurance that port related air pollution would not get any worse than it is now. AB 2042 specifies that port growth must not bring increased air pollution beyond a 2004 baseline level.

    AB 2042 is supported by the City of LB (vote of its elected City Council) and AQMD and opposed by the Port of LB (non-elected Harbor Commissioners) and PMSA. As previously reported by, AB 2042 has cleared the state Senate and the Assembly and now returns briefly to the Assembly for concurrence in Senate amendments before being sent to Governor Arnold Schwarzenegger.

    The AQMD has identified operations at the Ports of LB and L.A. as the largest source of air pollution in the South Coast Air Basin -- directly affecting millions of people (beyond the immediate harbor areas) in L.A. and Orange Counties. The Governor's decision on whether to sign AB 2042 into law, or veto it, could have political fallout for candidates he's backing in hotly contested state legislative races in the coming November elections.

    The written release distributed by PMSA goes on to state:

    PierPass is the result of a great deal of hard work, imagination and collaboration among international trade partners, the ports and state and local officials," said Jon Hemingway, chairman of the terminal operators group that developed the PierPass program. "But we are not done. We will continue to meet with stakeholders, including trucking companies, shipping agents, distribution centers, our ILWU workforce and others to get their valuable input into this effort and refine the program."...

    "This program represents a massive shift in the way terminals will operate in Southern California. It is now incumbent on all of us in the port community to make this program successful," said Glen Eddy, Senior Vice President of AMP Terminals Pacific Ltd.

    Rick Gabrielson, Senior Manager for Import Operations at Target Corp., said large retailers who are responsible for significant amounts of cargo entering the ports will work with Marine Terminal Operators and other links in the international supply chain to help ensure the program is a success.

    "No one likes to see transportation costs increase," Gabrielson said. "But our industry felt it was best to work together to develop a private-sector program to reduce day-time traffic. By working together, we are able to find solutions that work for everyone, which we believe is a better approach than legislation, no matter how well-intentioned. I know Target will do its part to shift as much cargo as we can to off-peak hours."

    Other major cargo interests also said they were confident the night and weekend terminals would help ease local daytime traffic congestion.

    "At Toyota, we already have a highly successful program to move a significant amount of cargo during off-peak hours when delivering parts to our dealers" said Tony Minyon, National Logistics Manager for Toyota's NAPO (service parts) division. †"This new program will allow us to continue to remove delays from our supply chain. †It's also in line with our commitment to environmental stewardship."

    Charlie Woo, CEO of MegaToys, said both large and small importers alike support programs that increase consistency and predictability to the international supply chain. † "Moving cargo during the less congested night and weekend hours will improve confidence that products will arrive in our distribution center when they are needed. †That is a significant step forward for importers." †

    The terminals participating in the program are: APM Terminals; California United Terminals, Inc.; Eagle Marine Services, Ltd.; Husky Terminals, Inc.; International Transportation Service, Inc,; Long Beach Container Terminal, Inc.; Marine Terminals Corp.; Pasha Stevedoring & Terminals, L.P.; SSA Marine; Trans Bay Container Terminal, Inc.; Trans Pacific Container Service Corporation; and, Yusen Terminals, Inc.

    Terminal operators are able to coordinate off-peak operations and agree to a fee structure under authority granted them by the Federal Maritime Commission...

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