One of the headaches importers face in congested ports is the delay for security checks. At some West Coast ports, you can wait three or four days for a security check by Customs and Border Protection (CBP), says Chris Mergenthaler, a partner with Geo. S. Bush & Co. (www.geosbush.com), a Portland, Ore.based freight forwarder.
Not so at the Port of Portland (www.portofportland.com), he claims. One reason is that the port has one container terminal and can perform full scans of containers as required, without double handling. He explains that this one issue can create significant delays for importers whose containers are selected for inspection.
At other ports where multiple terminals share a VACIS (Vehicle and Cargo Inspection System) scanner, the scanner must be scheduled and containers must be identified, mounted on chassis and put in a queue so they can be scanned when the VACIS machine arrives, says Greg Borossay, general manager of liner development for the Port of Portland. There's double handling to move the containers and line them up for scanning that the terminal operators in turn pass on to the ocean lines, who pass that cost on to the beneficial cargo owner, he continues. The terminal charge might be $160 per container, and the ocean carrier might add processing fees to that charge before passing it on to the shipper or consignee.
Three or four days added to a 10- or 11-day ocean transit is substantial, says Mergenthaler. There are a number of reasons for inspections, he continues. It might be based on the commodity, the country of origin or trade compliance. High volume and limited resources such as the shared VACIS scanners equate to longer delays, he says.
Smaller ports such as Portland have less congestion and can reduce the time to a minimum and, says Borossay, the fact there is no significant double handling means terminals have not seen a need to charge additional fees to carriers.
Other fees are coming into play at Southern California ports. To encourage off-peak handling, the Port of Los Angeles (www.portoflosangeles.org) has introduced its Pier Pass program which takes advantage of an increased labor force to open terminals and process cargo in offpeak hours.
Along with this capability comes an incentive — or a penalty. The Port of LA is charging a fee for each container handled during peak hours. The fee is refunded on containers handled in the off peak. The initial charge is $20 per container, and will go up to $40. The Port of LA is also instituting a fee for containers that move from Long Beach to use the rail connection at Los Angeles.
Railroads are ramping up service for the peak import season, including to the Northwest. Though a long tunnel restricts the Burlington Northern Santa Fe (www.bnsf.com) to 24 to 28 trains a day on its mainline through the Cascade Mountains, that track runs at river grade so it doesn't go through the mountains. That means less power is required to pull the trains, and more efficiency for the railroad.
Railcars are available in the Northwest, says Borossay, because there is a lot of domestic repositioning. A veteran of the Southern California ports from his days with an ocean carrier, Borossay notes the railroads must move railcars to those ports and pay to position the cars. As a result, they will strive to fill the capacity and maximize the length of the train before pulling it out of the port.
This has led to some concerns on the part of Bruce Seaton, interim executive director of the Port of LA, who told Logistics Today that he's taking steps to encourage the railroads to pull those trains sooner to reduce the congestion at the port.
For cargo bound to the Midwest or East Coast of the U.S., Portland has connections to inland barge services, which Mergenthaler says are far from fully utilized. The barge service can reach into Idaho and carry a variety of cargoes, including containers.
The Port of Portland will probably handle 175,000 twenty-foot equivalent units (TEUs) in 2005, but it has a capacity of 500,000 TEUs. That adds up to less congestion than even its Northwestern neighbors. Its position on the Columbia River is not a significant limitation on its ability to handle container ships, its proponents claim. Borossay notes that more interest from shippers could help convince the ocean carriers to increase calls at the port and provide more volume for the port.