The Port of Los Angeles will launch an incentive program next month to encourage terminal operators to move trucks faster and more efficiently.
Officials decided to launch the Truck Turn-Time and Dual Transaction Incentive due to an increase in imports and a decrease in exports, which has drained the market of containers needed for exports. They said the imbalance reduces the number of chassis in circulation, causing inbound containers to stack up and slow the movement on trucks in and out.
The program, starting Feb. 1, will offer financial rewards to terminal operators who decrease the amount of time it takes to process trucks dropping off or picking up cargo as well as those who can handle both transactions in the same trip.
Terminals that improve truck turn times by between 5% and 20% can earn between 50 cents and $2.75 per loaded or empty twenty-foot equivalent unit (TEU), a standard cargo measurement, according to port officials.
The amount rewarded will increase on a sliding scale as terminals improve turn times. Those that average turn times of 35 minutes or less in a month will earn the top rate of $3 per loaded or empty container.
Terminals also can earn between 40 cents and $1.40 per loaded TEU if at least half of all their trucks drop off one container and depart with another on the same trip.
Incentives will be rewarded each month, and the port estimates the program will cost about $7.5 million in its first year.
“These best practices are needed now more than ever to relieve pressure on the supply chain due to the ongoing surge,” Port of Los Angeles Executive Director Gene Seroka said. “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.”
Container terminals that opt in will have to provide additional details on truck movement, and the data will be collected and processed by the Port Optimizer, which is used to keep supply chain partners in the loop on cargo status.