There is a “port trucking crisis in North America” writes Phil Davies of Davies Transportation Consulting. The February 2014 action by port truckers in Vancouver is not the only example of where problems are occurring. Truckers at the ports of New York and New Jersey on the Atlantic coast also experienced outrage in February. Truckers at Georgia Port Authority’s Garden City Terminal, the Port of Oakland staged similar actions in November 2013 and Seattle in 2012. The Port of Los Angeles is not immune from strike action by truckers in their port.
Problems arise not from within the trucking sector but is a result of declining productivity of North American container terminals in handling truck traffic. The cost pressures on marine terminal operators from shipping lines in weak freight markets, some existing terminal owners paying too much when times were good, and the collective agreements used on waterfront only add to the challenge of providing service that is highly responsive to the needs of all global supply chain participants.
The chart below shows that a primary symptom of the port trucking crisis is a dramatic increase in “turn times”, the amount of time it takes a truck to load or unload a container at the terminal. In many cases, more time is spent waiting outside the terminal in a lengthy queue than is spent being serviced inside the terminal. The dominant model for port trucking in North America is the use of owner/operators paid by the trip; under this model, the costs of terminal congestion are born primarily by the truck drivers themselves.
Green: Port Botany, Red: Port Metro Vancouver, Blue: Los Angeles/Long Beach
Port Trucking Crisis Reasons
Wave Point Consulting associate, Phil Davies cites some reasons for poor productivity in truck handling and the impact of container terminal reservation systems:
- The use of larger container vessels concentrates terminal activity within a shorter time period, resulting in terminal congestion. At U.S. ports, chaos in the provision of chassis has compounded problems as shipping lines sell off their chassis fleets to competing companies.
- North American container terminals typically operate their truck gates for a single shift, usually around 8 hours. Elsewhere in the world, gate operations are typically carried on 24 hours a day. North American terminals are reluctant to offer extended gate hours because rigid shift structures and overtime premiums in current longshore collective agreements make it expensive to add an additional shift. Terminal operators at the Ports of Los Angeles and Long Beach created an organization called PierPass in 2005 which finances the cost of a second shift through fees paid by shippers on daytime moves. Truckers are now calling on the Southern California terminal operators to extend operations to 24 hours to alleviate long turn times.
- There are no financial incentives for terminal operators to maintain service levels for trucks. In Port Botany Australia, a system of mandatory performance standards for truckers and terminal operators; supported by financial penalties, has reduced turn times (including queuing) to 30 minutes or less. By comparison, recent turn times for terminals at the Port of Vancouver range up to 64 minutes, and at LA/Long Beach up to an hour and a half.
- In Port Metro Vancouver (PMV) there have been some thoughts expressed that extreme Canadian winter weather conditions have contributed to port trucking crisis. However, the chart below from PMV’s GPS trucking database does not seem to indicate that bad weather alone is the reason for the systemic delays experienced by drayage drivers.
The Surface Annual Transportation Annual Review 2014 survey results revealed that problems at marine container terminals and in the drayage sector have impacted the perceptions of logistics service quality at BC’s ports. While the overall response to the topic of service quality was “peer perform”, respondents raised some cautionary flags. For example, the warehouse and distribution, container and custom-tailored logistics sectors indicated the highest levels of dissatisfaction with the rail industry. In contrast, the container sector, break bulk cargo and the warehouse and distribution sectors expressed dissatisfaction with the service quality of drayage companies. Survey respondents who expressed their dissatisfaction with the service quality received from Port Authorities came from a variety of sectors. For marine terminals, survey respondents from large organizations (over 500 employees) expressed dissatisfaction whereas respondents from small firms (24 to 99 employees) indicated dissatisfaction with drayage companies.
The above summary raises a few important questions. The first issue is which North American ports and marine container terminals have the best processes in place for the port trucking sector? Secondly, have marine terminal operators received a sufficient return on past investments (in technology, container terminal management and labour practices ) to justify further investments to improve the situation for truckers? Or are we still all reeling from the impacts of the 2008 recession and the fact that we are in a fundamentally different commercial environment that makes achieving significant efficiency improvements (while address equity issues for the drayage sector) in the North American port trucking industry almost impossible to achieve.