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Port of Los Angeles to reward terminals for higher truck productivity

Port of Los Angeles to reward terminals for higher truck productivity
The scheme begins on February 1

As labour shortages continue to lengthen turnaround times for truckers, the Port of Long Angeles has launched an incentive programme to move trucks faster and more efficiently through its container terminals.

The port’s Truck Turn-Time and Dual-Transaction Incentive Programmes offer terminal operators two ways to earn financial rewards: one for shortening the time it takes to process trucks dropping off and/or picking up cargo, and the other for trucks handling both transactions in the same trip.

Under the new incentive programme approved by the Los Angeles Harbour Commission, terminals that improve truck turn times by 5% to 20% can earn between US$0.50 and US$2.75 per loaded or empty teu.

The rate of the reward increases on a sliding scale as terminals improve turn times. If a terminal averages turn times of 35 minutes or less in a given month, it will earn the top rate of US$3 per teu.

Terminals can also earn between US$0.40 and US$1.40 per loaded teu when at least half of all trucks calling their facilities drop off one container and depart with another on the same trip.

The percentage is based on the number of dual transactions out of all gate moves for the month. Like the turn-time incentive, the rate of the reward increases as the terminal’s percentage of dual transactions grows.

Port executive director Gene Seroka said: “These best practices are needed now more than ever to relieve pressure on the supply chain due to the ongoing surge.

“Ports are more fluid when trucks move quickly in and out of the gates and more productive when a truck delivers one container and leaves with another in a single trip. We’re going to reward terminals for better performance.”

Drayage trucks handle approximately three-quarters of all import and export containers moving through the port while in recent months, imports have dominated the flow of cargo, draining the market of containers needed for exports.

The imbalance has also reduced the number of chassis in circulation, caused inbound containers to stack up in terminals, and slowed the movement of trucks in and out of terminals.

Both incentive programmes, which will be paid monthly, begin on February 1 and are based solely on the teu volume handled by truck. For the first year of the programme, the port’s cost is estimated at US$7.5m.

To participate, container terminals must opt in and provide additional data on truck moves, which will be collected and processed by the Port Optimiser tool.

This port uses this tool to keep its supply chain partners informed on the status of cargo before it arrives, so terminals, trucking companies, railroads and others can plan and allocate resources in advance.