Friday, April 27, 2018

PierPass Pricing Progress

By Karen Robes Meeks

PierPass’ OffPeak program for easing traffic congestion at the ports of Los Angeles and Long Beach is expected to roll out a new pricing model in August. The new appointment-based system will charge one flat fee on day and night container moves, the organization announced earlier this month.

The 12 marine terminal operators that make up the West Coast MTO Agreement approved the new model—which is still subject to regulatory approval—after 18 months of study and consultation.

"The industry has been demanding 'PierPass 2.0,' and we are responding," said PierPass President John Cushing. "The original OffPeak program was an innovative and highly effective solution to the challenges we faced in 2005. But it was fairly inflexible, whereas an appointment-based model is scalable and can evolve to meet changing industry needs, technology and practices."

OffPeak currently charges a fee on weekday daytime cargo moves to encourage cargo owners to shift OffPeak hours to nights and Saturdays.

The latest version replaces this two-tier fee structure with a single flat fee for shifts and use appointments to spread traffic across the two shifts.

Applying the fee to both day and night cargo will lower the fee by more than 55 percent and still have enough money to run the extended gate hours.

Instead of the current fee of $72.09 per TEU, users will pay a fee of $31.52 per TEU; the rate for all other container sizes will be a flat fee of $63.04, according to PierPass.

Port leaders applauded the change.

“I'm pleased and encouraged that PierPass members are taking a significant step forward to improve efficiencies at the San Pedro Bay port complex,” said Port of Los Angeles Executive Director Gene Seroka.

“The Port of Long Beach is pleased with the progress PierPass has made in working with industry stakeholders to improve night gate operations in our terminals,” said Port of Long Beach Executive Director Mario Cordero. "As ships are getting bigger and volumes increase, efficient gate management is critical to our ability to move cargo in a reliable, predictable and expedient manner," he added.

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