The Port of Los Angeles is set to launch an incentive program that will get trucks moving faster and more efficiently through its terminals, officials said Tuesday.
Scheduled to begin February 1, the Port’s Truck Turn-Time and Dual-Transaction Incentive Program will give 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.
The move is in response to surging cargo volume that continues to put pressure on supply chains. Imports have dominated cargo flow over the last few months, draining the market of containers needed for exports and slowing the movement of trucks in and out of the terminals, officials said.
“These best practices are needed now more than ever to relieve pressure on the supply chain due to the ongoing surge,” Port Executive Director Gene Seroka said in a statement. “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.”
Terminals that improve truck turn times by 5% to 20% can earn between 50 cents and $2.75 per loaded or empty Twenty-foot Equivalent Unit (TEU), the standard measure for intermodal containers. 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, for instance, it will earn the top rate of $3 per loaded or empty container.
Also, terminals can earn between 40 cents and $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, officials said.
Incentives will be paid monthly as long as the program remains in effect. The program is expected to cost the Port roughly $7.5 million in the first year, officials said. Data is tracked via the Port Optimizer, a tool the port uses to keep its supply chain partners up to date on the status of cargo before it arrives.
The incentives are the newest in a series of port initiatives aimed at improving cargo efficiency. In September, the Port launched The Signal, a dashboard for sharing data on inbound containers three weeks before their arrival. In November, it added a function called “The Return Signal” to the Port Optimizer site so the trucking community knows when and where to return empty containers throughout the San Pedro Bay complex.