Harbour Link Blog Archive

Being Held Ransom by Reservation Issues and the Terminal Gate Container Initiative (TGCI)

Posted 2012-04-23 by Harbour Link in opinion

The purpose of this Blog is to discuss the service and operational issues that are preventing the container drayage sector to efficiently service the Port of Vancouver due to the constraints of the reservation systems and the impact of the Terminal Gate Container Initiative adopted by the container terminal operators.

The severity of the above issues and the cost impact they are having on the competitiveness of Port of Vancouver as Canada’s Pacific Gateway to global markets cannot be understated.

We will start with the reservation issues:

The reservation systems used by the Terminal Operators (primarily Deltaport and Vanterm) prevent the trucking sector from being able to secure sufficient and timely reservations needed to achieve the seamless flow of containerized cargo in and out of the Port.

Why is this?

First: The reservations provided by the terminal operators during present gate opening hours are insufficient to accommodate the volume of reservations needed to dovetail with the shipping / receiving schedules and supply chain requirements of the Port’s customers. By the very fact there is a daily shortage of reservations is compelling evidence that the gate hours in effect currently at all terminals need to be extended to accommodate daily traffic volumes.

Second: When reservations are obtained, the terminal operators are frequently unable to complete the reservations they issue due to operating reasons within their terminal. The terminal operator’s failure to process reservations in a timely manner propagates long line-ups of trucks outside the gate, (often 100 trucks or more). This frequently results in trucks having to wait outside the terminal for 1 to 3 hours beyond the allotted reservation “appointment” window.

Third: The terminal operators refuse to acknowledge any accountability for their inability to process trucks within the time window of the reservation given by them. The frequency of long lineups of trucks outside of terminals suggests one of two things; either the terminal operators are being unrealistic about their ability to handle such large truck volumes within the time parameters set by them to complete each reservation or, other terminal priorities are taking precedence over the obligation of the terminal operator to fulfil reservations issued by them to service truck traffic.

The underpinning reason why the terminal operators adopted a reservation system was to achieve a manageable flow of truck traffic in/out of the terminal in a manner to optimize terminal fluidity and the deployment of equipment and manpower to enhance operational efficiency. Equally, to eliminate / minimize the unnecessary queuing of trucks, which regrettably in 1999 and 2005 led to port shutdowns and has once again become a daily occurrence at the Port of Vancouver container terminals.

As a truck carrier dedicated to providing services at the Port of Vancouver, we feel compelled to ask: how can a truck carrier keep reservations when trucks are forced to wait outside the gate entrance of a terminal for hours on end beyond the reservation time window that was given by the terminal operator to fulfil the reservation at their terminal?

If the reservation systems worked, the queuing of trucks outside of the terminals would be minimal. Moreover, it would encompass the ability for truck carriers to plan reservations to optimize two way truck movements and include the ability to provide sufficient reservations to accommodate the daily supply chain of Canada’s importers and exporters.

To add to the reservation woe by truck carriers is the audacity of the terminal operators to impose a missed reservation penalty of $25 against a truck carrier each time a reservation is missed (regardless of the circumstances) and not to accept any quid-pro-quo accountability for the huge losses being incurred by truck carriers, caused by the terminal operators inability to fulfill reservations in a timely manner.

It is important to state that we fully support the assessment of penalty fees when a truck carrier legitimately fails to keep a reservation, but not for failures that arise for reasons beyond the truck carrier’s control, for example, resulting from queuing outside the terminal or the frequent delays caused by train switches that block road access to a terminal within the port area. We strongly believe that the protocols for the levy of penalty fees by terminal operators against truck carriers must include reciprocal quid-pro-quo penalties when a terminal operator fails to fulfil a reservation within the allotted time window of a reservation.

Trucks waiting for hours in lineups to access container terminals is extremely costly and a huge waste of resources. In addition, truck carriers are penalized for missed reservations by the terminal operators and incur cargo, container and equipment demurrage expenses for missed reservations. Equally, the thousands of O/O’s that work for truck carriers can't make any money waiting in lineups and the carriers have their customers at risk due to service failures that flow from the inability of the terminal operators to provide timely services for the reservations they issue.

The lengthy delays being incurred at container terminals repeatedly results in trucks being unable to complete planned daily assignments, which in turn, results in reservation times being missed at other terminals for the pickup and delivery of other containers. The irony of the foregoing situation is the terminal operators contribute to the delay that causes a missed reservation, and then assess the truck carrier a $25 penalty which goes directly into the terminal operator’s cash register. It doesn’t stop here; To add salt to the wound, PMV allows the container terminal operators to act as the adjudicator of any appeal submitted by truck carriers against the multi thousands of dollars in penalty fees billed monthly by them for, what is best described as “the self perpetuation of missed reservations by the terminal operators due to their own inability to provide timely services”. Surely, in any reasonable system, the adjudication of appeals of penalty fees for missed reservation cannot be conducted by the person meting out the penalty? Rightfully, the appeal process must be performed by an independent third party to provide both balance and reasonableness to the final ruling.

In the case of Harbour Link, all of our trucks are equipped with GPS and Geo fencing technology, which enables us to track the elapsed time of our trucks waiting in line-ups and within the port area on a real time basis for each port visit/transaction. Even armed with this substantive accurate information, the terminal operators refuse to accept accountability, neither for their own failure to meet reservation windows, nor for the knock-on consequences that flow from the lost time that prevents trucks from being able to meet subsequent reservation windows at other terminals planned as part of each trucks allotted daily activities. More galling, if a truck carrier doesn’t pay the penalty fees as billed by the terminal operator by the end of each month, regardless of their legitimacy or whether the penalty fees are under appeal, the terminal operator is permitted by PMV to impose an outright ban on the truck carrier from entering the Port to provide further service to customers until the bill is paid in full. This totalitarian approach gives the terminal operator the power to put a truck carrier like Harbour Link with multi-millions of dollars invested in assets and that provides services to a strong base of important port customers, completely out of business.

The totalitarian approach by terminal operators extends to the daily behaviour of most port interface staff, from security guards working outside the perimeters of the terminal to gate personnel, clerks and senior managers. Any party (a new truck driver or a seasoned member of the truck carrier’s staff), if they make an honest mistake or innocently deviate from the required protocols set by the terminal operator, it culminates in an immediate response by the terminal operators staff threatening the Company, or the culprit person, that they will be barred from further access to the container terminal. This begs the question “How does a terminal operator engaged by the Government of Canada to provide terminal services as the custodian of third party controlled cargoes and containers essential to fulfilling Canada’s global trade objectives, be permitted to exercise totalitarian authority over who will receive access to the Port?

Suffice to say, the behaviour of the operators and their approach towards reservation issues are very harmful to the Port of Vancouver as Canada’s Gateway to global markets and include the following:

i. The inability of the drayage sector to secure sufficient reservations to pick-up and deliver containers for customers to meet daily supply chain requirements. This is a major trade barrier to the port. Under present operating conditions a drayage firm must receive a minimum of 3 days prior notice from their customer to deliver or pickup containers at the port. Even with advance notice, it is often extremely difficult to secure reservations to dovetail with the pick-up or delivery requirements requested by customers and virtually impossible (9 times out of 10) to deliver or pickup containers within a shorter time window.

ii. The inability of the existing reservation system to dovetail reservations to enable a truck carrier to deliver and pick-up containers as a two way container movement. Achieving two way container movements would enable a truck carrier to optimize truck utilization and operational performance. It would also substantially reduce road congestion. Presently, only a small portion of container movements at the port are completed as two way container moves. In most cases truck carriers are required to dispatch two trucks, one to pick up and the other to deliver containers, which, could be accomplished in one truck cycle if the reservation system was structured to allow the two-way coordination of reservations.

iii. The need to establish a workable solution to the present requirement by each truck carrier to LOG IN AT MIDNIGHT to secure reservations needed to serve their customers. If reservations are not secured within the first 5 minutes after midnight, it frequently results in no reservations being left to fulfill customer supply chain requirements. The simple solution is for the terminal operator to develop software to immediately recapture all newly released reservations and to re-release the reservations at the start of each business day. Having to get staff to rise from their beds at midnight is absurd. More absurd is the edict by the terminal operators that bar a truck carrier from using computer systems to secure available reservations; meaning, if you use computer technology to capture reservations you will be banned from entering the port. The use of information technology is essential within all sectors of business and perhaps more so in the case of transportation that serves a global marketplace.

iv. To find a solution to reduce/eliminate the gate line-ups at the container terminals that frequently prevent truck carriers from meeting the time window of a reservation for the pick-up or delivery of containers. As previously noted, trucks are frequently caught in long gate entry line-ups waiting to access the container terminal. These line-ups often result in the queuing of hundreds of trucks, which upon reaching the terminal gate, are turned away because the time window of the reservation has expired. The principle of a workable reservation system is to enable the terminal operator to schedule daily work in a manner to prevent gate line ups and achieve a seamless flow of truck traffic to optimize fluidity through the terminal and to enable trucks to receive service within the time window of the reservation.

v. Establish a provision wherein reservation compliance is measured from the time a truck first joins the line up for access to the container terminal. The refusal by terminal operators to ignore the fact that the truck has been ready and waiting outside the terminal to deliver/pick-up a container against a valid reservation and then to impose a missed reservation penalty fee of $25 arising from their own inability to fulfill the reservation is, by any measure, ethically wrong and a self serving “cash grab” business practice. Each day truck carriers miss reservations due to the time incurred by their trucks waiting in a line up to access the terminal.

vi. Adopt a process that enables truck carriers to verify the clearance of imported goods through a central information system computer-to-computer. The present methodology of having staff constantly scanning computer screens to check the release of import containers is a retrograde process that moves the Port of Vancouver back to sailing ship times. Most World Class Ports (and many third World Ports), use centralized information systems, such as ASYCUDA, an electronic data entry and automated interchange of information system developed by UNCTAD that uses international codes and standards developed by ISO, WCO and the United Nations. ASYCUDA provides for Electronic Data Interchange (EDI) between traders, service providers and Customs using EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) rules.

So what can be done to achieve a workable reservation system?

a) A workable reservation system must provide sufficient reservations to accommodate the ingress and egress of daily truck volumes to accommodate the supply chain requirements and container volumes required by importers and exporters. This means, provide sufficient reservations within the period between the Earliest Receiving Date (ERD) and the free time period granted by the terminal operator for importers and exporters to pickup/deliver their containerized cargo for each vessel.

b) It must enable truck carriers to achieve productive two way container movements for trucks i.e. permit each truck on the entry leg to deliver a laden export container or empty container and on the egress leg to pick-up an import container or empty container whenever possible. The reservation system must be able to match requested reservations in a manner to optimize two-way movement (a container in combined with a container out) as much as possible for truck carriers.

c) When the daily demand for reservations exceeds the capacity limitation of the terminal, the reservation system must accommodate unfulfilled reservation requests automatically for the next business day.

d) The cancellation of reservations should continue to be permitted up to the day prior to the reservation without penalty.

e) When a reservation has been issued for an export booking, the reservation system should permit swap flexibility to enable the truck carrier to utilize the secured reservation for an alternate valid booking note number when, due to reasons beyond the truck carriers/shippers control, the original shipment covered by the reservation becomes unavailable for the reservation time slot provided.

f) The reservation system must provide same day reservations to accommodate the large transfer of containers between the port and the railheads (CP & CN) and for perishable containerized cargo, as well as for the transit of containers by long haul trucks which originate from or are destined to points outside of the Greater Vancouver - Lower Mainland.

g) Because of the dynamics unique to long-haul trucking, the reservation system should provide sufficient flexibility to enable the “time window” for long-haul trucks to be adjusted and or to be by-passed due to the uncertainties created by weather, traffic and road conditions.

h) To maintain the integrity of the reservation system, the reservation system should include provisions that hold both the terminal operators and truck carriers equally accountable for their commitments and obligations to the reservation system.

i) A major contributor to help solve the insufficiency of available reservations would be to extend the use of night gates to all container terminals. This would enable truck carriers to reallocate many of their customers work from the day time to be performed at night, which in turn will generate sufficient work to enable the hiring of night drivers to permit their truck fleet to also be deployed at night. Adding night gates will provide the terminal operators with added night hours to accommodate the additional reservations that are urgently required. See our blog: Solutions for mitigating growing traffic congestion.