Traffic is an old rival for the cities of Los Angeles and Long Beach, California.
For decades, the two have been playing a wicked game. Growth is essential for any city, but for every new business or residence, a truck is likely to come with it. As cities grow, then, traffic seems inevitable.
Congestion, though, is a sign of another problem: inefficiency. A problem which, officials believe, can be fixed through a collaboration on infrastructure, transport operations and shared information.
An early model in the battle against congestion
Several projects in the past 30 years have proven that urban planning theory for the region, but few are clearer than the Alameda Corridor, a 20-mile railroad expressway.
At first, the corridor was simply a solution to a growth problem. Ports were worried the region’s infrastructure could not handle their ongoing growth spurt, back in 1982. The corridor was a way to expedite traffic out of the port without putting it on the roads.
It would take 20 years to complete the $2.4 billion project in 2002. But by 2012, the benefits to congestion were visible.
The Alameda Corridor Transportation Authority said in a press release its completion had eliminated 200 rail crossings — where a motorist could wait for 20 to 30 minutes for a train to pass at 10 to 15 mph — and allowed trains to increase their velocity to 40 mph.
"The Alameda Corridor was designed to take trucks off local freeways and trains off the rail lines that go through our neighborhoods, and it works beautifully," Long Beach City Council Member Gary DeLong said in a statement at the time.
Equally importantly, though, was the corridor’s contribution to the city’s growth.
"Without the rail line dedicated to port traffic, we would have seen massive and continuous gridlock all around Southern California, especially during the height of the import boom a few years ago," said DeLong.
The expressway is now a critical artery in Los Angeles’ economy, carrying 39 trains out of the ports each day. But in its success, the corridor seems to have injected another trait into the city’s bloodstream: a blueprint for future growth.
Ports lead a plan for growth
Perhaps by necessity, the city’s two ports — Port of Los Angeles and Port of Long Beach, neighbors on the San Pedro Bay — have taken the lead in adapting the blueprint for modern needs.
Cargo needs continue to grow, but the model for sustainable growth outlined by the Alameda Corridor — city-wide collaboration on rail infrastructure, and a decision to coordinate on operations — is limited in today’s day and age.
After all, the region can only build so much terminal space or bring in so many trucks to handle cargo before it adds to the traffic problem.
Weston Labar, CEO of the Harbor Trucking Association, painted a picture of the problem in a conversation with Supply Chain Dive. Imagine a port handles 1 million TEUs (twenty-foot equivalent units, the size of a small container) with 5,000 trucks. When it grows to handle 2 million TEUs, what is a port to do? It is a lot harder to fit 10,000 trucks in the same space.
"In the past, many ways in which we would get out of things is just to build more and more and more – which is still a good solution in many cases," Chris Chase, marketing director at the Port of Los Angeles, told Supply Chain Dive.
Today, though, cost, space and environmental issues make that process unrealistic.
"You just can’t keep filling in the bay to create more terminal operating procedures," he said. "But the idea of using technology and getting players who are siloed from each other to work together, that was the right approach."
The Port of Los Angeles said it is not currently experiencing congestion. But it did in the past, as late as 2015. Chase, reflecting on the experience, said the region’s ports are improving traffic efficiency in three ways: a collaborative technology portal; extended gate hours; and, of course, new infrastructure.
Night gates: A way to grow the pie
One of the first — and at the time revolutionary — strategies the San Pedro Bay ports tested to reduce daytime traffic was to extend gate hours.
In 2004, all the marine terminal operators at the Port of Los Angeles and Port of Long Beach banded together to form a not-for-profit company called PierPass. The company was responsible for designing and managing the process for extended gate hours at the two ports. The goal: to divert some traffic from day to night and reduce congestion.
The economics behind the program were simple. PierPass would manage a "traffic mitigation fee," a surcharge charged to truckers during peak daylight hours to cover the costs of extended gate hours. In turn, drayage providers would benefit from reduced congestion, move more cargo and earn more revenue.
"The more containers somebody is able to move, the more money everybody makes," said Labar. Efficiency is in all port stakeholders’ interest.
Ultimately, the night gates program accomplished what it set out to: divert traffic. Between 2002 and 2003, 88% of containers were picked up during the day. Today, the ports at the San Pedro Bay operate a near 50% split between day and night traffic, John Cushing, CEO of PierPass said at a Harbor Trucking Association meeting in October.
The program achieved this somewhat sustainably, too, in terms of cost. PierPass collected $197 million in traffic mitigation fees in 2017. In that same year, operating night gates cost terminals $274 million. It does not cover the costs, but it is a subsidy that helps grow the pie for all actors.
In recent years, however, PierPass has become a point of controversy.
"The solution became the problem."
CEO, Harbor Trucking Association
Over time, the industry had reacted in an unexpected way: It created a new rush hour at the ports, between 4 p.m. and 8 p.m., hugging the periods of time around when the peak surcharge ends and the night gates open.
At first, Labar said, this shift in traffic was palatable. But the moment terminals adopted another traffic-mitigating solution — appointment systems — the spoils of night gates became uneven.
Labar claims terminals would give large trucking companies and cargo owners preference to night gate appointments, due to higher volumes. The practice, however, left smaller stakeholders operating during the daytime and paying the fee that allowed night gates to operate, without ever gaining access to these.
"The solution became the problem," Labar said. (Recognizing this, PierPass has announced an update to its program, encouraging appointments but adopting a flat fee across all shifts.)
The snowball effect
By nature, supply chains are particularly vulnerable to what Labar calls the "snowball effect" in transportation: one actor’s decision can have vast implications down the chain, and these implications accumulate over time.
Theresa Dau-Ngo is deeply familiar with this effect, as the manager of transportation development at the Port of Long Beach. Her job is to plan for present and future transportation needs at the ports, and often, to mitigate traffic issues caused by these.
One of the projects the Port of Long Beach is currently working on is the General Desmond Bridge Replacement. The bridge is a "critical connection that serves both the Port of Long Beach and Port of Los Angeles" and its replacement will "add much needed capacity," Dau-Ngo told Supply Chain Dive.
The project had unintended side effects, she said. Capacity improvement plans can be disruptive, too. In this case, construction has shifted traffic flows daily, requiring active management from a cross-divisional port traffic management team.
Dau-Ngo’s team typically models to forecast these disruptions, but she recognized a way technology could help make those models more accurate. To date, however, the data they have is not perfect and could be improved.
"One of the things is that a key input for us in our transportation modeling is origin to destination information," she said when asked what was on her wish list. "Having information about the truck trips, making patterns, would help us understand the needs at the gate."
Visibility: The new root of efficiency
The Port of Los Angeles and the Port of Long Beach are acutely aware of the many benefits increased data could have on supply chain optimization. After all, the two ports have spearheaded and piloted a federally-recommended port information portal.
"The industry provides fantastic data in a silo," said the Port of Los Angeles’ Chris Chase.
Much of the data transportation, port and city managers need to operate effectively already exists in the supply chian. The problem is, today, much of it is not exchanged. However, Chase said it is pretty easy to find the necessary data: if you follow the money.
In late 2017, after more than a year of investigating supply chain innovation, the Federal Maritime Commission published a report with one core recommendation for ports: better data sharing could drastically improve efficiency. The regulator said ports currently operate as a "black box" for many stakeholders. It encouraged the industry develop a visibility portal, that could be scaled nationally, to fix the problem.
"The industry provides fantastic data in a silo."
Marketing Director, Port of Los Angeles
The Port of Los Angeles and GE took the recommendation in stride, and have in the past 18 months been testing such a portal, called the GE Port Optimizer. The project is an effort to develop what Chase calls a "system of systems" in Los Angeles. If more information is shared, if all actors could get two more days of notice on when a container will arrive, cargo owners, tucks, chassis providers and drivers could better plan their schedules.
Providing an example, Chase said a typical dispatcher has between a dozen and two dozen windows open on an internet browser to do their job. The portal would seek to bring all the information together into a single dashboard.
Based on the port's pilots, Chase estimated the GE Port Optimizer could improve efficiency by 8% to 12% in the facility. "The end goal is to move cargo more efficiently," he said.
Building more still works
Growing the pie by 12% may still not be enough to handle the Los Angeles metropolitan region's growth, however, with port volumes having grown up to 7% each year since 2016.
To manage the increased volumes, the city, ports and transportation providers will have to look to an old tactic: building more infrastructure. And like in 1982, rail is once again emerging as a solution.
"We are looking at ways to grow greener, and rail is a big part of the solution," Dau-Ngo said. Rail, she said, can help meet the Los Angeles Sustainable Freight Advisory Council’s goal to reduce carbon emissions by diverting truck traffic to on-dock rail and short-haul rail. "It can decrease the local congestion."
Today, the Port of Los Angeles and Port of Long Beach each have an rail project on the docket.
At Long Beach, the port is looking to restructure its Pier B rail facility to improve on-dock access, eliminate a crossing and better connect to the Alameda Corridor. The Port of Los Angeles, meanwhile, announced last month it would move forward with a $34 million plan to add on-dock capacity at Pier 400.
The two projects could not move forward without city and state-level collaboration to secure federal funding, however.
In fact, few of the mentioned projects would be possible without a high degree of collaboration between city officials and supply chain stakeholders. Lee Peterson, media relations manager at the Port of Long Beach, said altogether, the projects speak to a culture of collaboration in the region.
"They don't just think selfishly," he said of the region’s leaders. "Our cargo has to cross all across the U.S., but first it has to move outside of Southern California."
The Alameda Corridor, the General Desmond Bridge Replacement and on-dock rail projects, show traffic mitigation requires a heavy dose of planning, to get the both the funding and buy-in for solving congestion. PierPass and the GE Port Optimizer, meanwhile, reveal technology can be a modern weapon to supplement those efforts — if stakeholders work together.
"Collaboration is a very entrenched effort," Dau-Ngo said. “"It's a recognition of the need to be a unified voice, but also that there are limited resources."