From time to time terminals across the country, especially on the West Coast tends to get congested. Due to the congestion, the berthing of ships may be affected leading to heavy delays for the customers which also results in loss of production, loss of business etc.
To alleviate the congestion, port and terminal gates may be required to work at night or over the weekends to avoid daytime traffic.
Needless to say, adding night shifts to any operation means increased costs, especially for terminal operators as night time labor rates are always higher than day time labor rates.
When terminal operators’ costs go up, it will naturally be passed onto the trade which then increases the cost of all commodities.
PierPass OffPeak program was a program started in 2005 by the terminal operators specifically in the ports of Long Beach and Los Angeles to address these congestion and cost issues.
The way this program works is that the terminal operators levy a charge known as Traffic Mitigation Fee (TMF) to the customers directly.
The Traffic Mitigation Fee pays for the night shifts and Saturday shifts and is designed to compensate for the daytime congestion in and around these ports.
The Traffic Mitigation Fee is charged for containers moving during peak hours of between 03:00 hrs to 18:00 hrs. All the container terminals in these two ports encourage haulers to use these non-peak timings of 18:00 hrs to 03:00 hrs to pick and drop off containers to avoid congestion bottlenecks.
As of August 1st, 2017, the Ports of Los Angeles and Long Beach California announced a 2.3% increase in the Traffic Mitigation Fee (TMF).
The current TMF fees stand at US$72.09 per 20’ container and US$144.18 per 40’ & 45’ container.
In order to understand your freight charge costing, it is important to note that the Traffic Mitigation Fee is a pass-through expense to be charged as necessary and not part of any negotiated contract.