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72 Truck Drayage Productivity Guide Drayage Volume vs. Average Turn Time - Jan - March 2009 Import Volumes vs. Non-Trouble Turn Time - 2008 90 100 80 90 70 Average Turn Time (minute) 80 Avg. Turn Time (minute) 60 50 70 40 60 30 50 20 40 10 - 30 0 200 400 600 800 1000 1200 500 700 900 1100 1300 1500 1700 1900 2100 Number of Trucks Entering Daily Import Volume (a) Example 1. (b) Example 2. Figure 91. Congestion impacts. Marine Terminal Disruptions Brief or extended disruptions to routine marine terminal operations will create drayage bottle- necks and impose delays. The bottlenecks and delays can result from the following: An interruption in terminal functions, followed by congestion while the backlog of postponed transactions is cleared; A short-term diversion of terminal resources (equipment or staffing) to other functions, leaving drayage-related functions under-equipped or under-staffed and therefore slower; A change in terminal operations or processing that creates short-term confusion and ineffi- ciency; and An increased workload for which the terminal was not sufficiently prepared, such as a trade surge, military deployment, or ocean carrier terminal shift. Longer disruptions result from persistent congestion, major terminal changes, or start-ups at new terminals. Short-Term Interruptions A marine container terminal is a complex enterprise reliant on infrastructure, equipment, sys- tems, and labor working together. Cost-conscious planners and managers keep redundancy and excess capacity to a minimum. Moreover, the primary goal of the terminal's direct customer, and thus the primary goal of the terminal itself, is to turn the vessel on schedule. If equipment or labor are in short supply, the vessel will be served first and drayage-related functions later. Marine terminals usually have some margin of excess capacity in mobile lift equipment such as RTGs, straddle carriers, and sideloaders. The loss of one or more pieces of equipment due to damage or failure will, however, slow drayage operations, especially in busy periods. Field work and observations indicate that it is common, although not universal practice to assign the oldest, slowest, and least reliable mobile equipment to serve drayage trucks, reserving the best equipment to support vessel operations. Information systems technology is far more reliable than it was a decade or more ago but "the computer is down" is still a familiar and frustrating refrain. The intricate flow of documentation

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Marine Terminal Container Yard Congestion 73 required to support terminal and drayage operations comes to a stop when the information system is unavailable for any reason. The near-complete reliance of the industry on computers and other electronic systems means that full manual operation is no longer a reasonable possibility. Some sub- systems, such as gate RFID or OCR systems, can be bypassed if necessary. A shutdown of the termi- nal operating system, however, will bring all operations to a halt. Many of the worst terminal queuing problems are due to some variation of "the system is down" that affects all gates and all drivers. The most common disruptions to routine operations are probably late vessel arrivals or delays in handling a vessel. Because turning the vessel is the highest priority, all available resources will be used to expedite vessel handling. Access to crane-side container stacks is typically restricted while the cranes are serving a vessel, and the terminal may suspend receipts of containers for other voyages. If a vessel is delayed by more than a few hours, the availability of import containers from that vessel will be significantly delayed as well. This delay will, in turn, leave drayage drivers unexpectedly idle while it lasts, but doubly busy thereafter attempting to meet customer demands. The congestion multiplies when delays to one vessel prevent another from being handled on schedule. As Figure 92 suggests, late vessel arrivals are common. The structure of labor contracts can lead terminal operators to delay unloading a vessel further. Since longshore labor is called on a shift basis and paid for a full shift regardless of how many hours are worked, terminal operators avoid calling longshore labor for partial shifts. A vessel that arrives partly into a shift might there- fore not be handled until the start of the next full shift. At terminals with on-dock rail facilities, a late train also can cause an unplanned diversion of resources or congest the container yard. Terminal Changes Changes to marine terminal processes, tenants, and facilities will disrupt drayage operations and reduce productivity for the duration of the disruption. The loss of productivity and delay to 4Q 2009 Schedule Reliability Hamburg Sud APM-Maersk Hapag-Lloyd CMA-CGM UASC APL Evergreen Line Hyundai MM OOCL MOL NYK CSCL ZIM Mediterranean SC Hanjin Shipping Yang Ming Line "K" Line CSAV Group COSCO Pacific Int. Line 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Drewry analysis for 4Q2009, cited by E. Kolding, Maersk Line, Trans-Pacific Maritime Conference presentation on March 1, 2010, Long Beach, CA. Figure 92. On-time performance of major ocean carriers.

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74 Truck Drayage Productivity Guide imports and exports depends on the way in which the change is handled as well as on the nature of the change itself. Procedural Changes On the lower end of the scale, marine container terminals frequently make minor procedural changes. These changes range from the way in which information is communicated at gates to the processes for handling trouble tickets. Such changes will generate temporary confusion that can be exacerbated by language differences. Drivers who regularly serve the terminal will adjust to the new procedures with the first few trips. Drivers who do not visit the terminal regularly, however, may have a longer learning period. Minor Facilities and Operations Changes Marine terminals likewise make frequent minor changes to facilities. Parking and stacking arrangements are changed, pavement is re-striped, and new lift equipment is put into service as needed. These changes also will result in temporary confusion; again, drivers who visit the port most frequently will adjust quickest. New Programs and Regulations The advent of TWIC requirements, clean truck plans, and new chassis pools has led to more extensive disruption than routine procedural or facilities changes. New Terminals Although the opening of new terminals invariably requires some adjustment period in which operations are anything but smooth, there are mitigating factors, as follows: The opening of a new terminal is usually accompanied by more detailed planning and com- munication than changes to existing terminals; New terminals (usually) open at far less than their ultimate capacity, giving them substantial operating slack at the outset; Stevedores and ocean carriers routinely assign their most experienced and successful staff to assist in the opening of new terminals; and Although new equipment and systems have "teething" problems, they also are generally free of "make do" legacy accommodations. As a result, most new terminals go through only a brief adjustment period. Persistent Congestion The serious, port-wide congestion at Los Angeles and Long Beach during the peak season of 2004 received widespread media and industry coverage. The congestion resulted from unanticipated cargo growth coupled with a longshore labor shortage and disruptions to UP rail service. The outcome was an inability to move cargo through the terminals fast enough for peak season vol- umes (which average 11% above the annual average throughput at LALB). During the worst period, over 100 vessels were waiting in San Pedro Bay to be unloaded, and terminals were diverting all available resources to handling the vessel backlog. There were the following multiple, compounding repercussions for drayage: As terminals filled up with containers that should have been moving elsewhere, inventories and location systems fell behind, making it harder and more time-consuming to locate and transfer the correct container; The shortage of longshore labor and the priority given to vessel operations meant that the shortfall would be most keenly felt in gate, clerical, and CY operations that support drayage; Drayage firms found themselves unable to efficiently return containers in their possession, yet were being charged demurrage for keeping them beyond the authorized free time; and