PierPass to increase fee in SoCal ports
Marine terminal operators in the ports of Los Angeles and Long Beach have agreed to increase the fee assessed to containers moving through terminals during weekday, daytime hours.
The fee is part of the PierPass program, implemented in 2005 to fund night and weekend gate operations at the ports' 13 terminals. The program was designed to better utilize terminals and spread container traffic movement throughout the day to alleviate bottlenecks on local freeways.
The fee will be increased from $50 to $60 per TEU, so that a 40-foot container would be assessed a fee of $120 as of July 4. It is applied to containers moving through terminals from 3 a.m. to 6 p.m. Monday through Friday. Exemptions exist for intermodal cargo.
'This is the first increase in the TMF (traffic mitigation fee) since 2006,' said PierPass, the nonprofit organization set up by terminal operators to collect and disburse the fees. 'Since then, hourly labor costs have increased 31 percent. The terminals have operated the OffPeak gates at a loss since the program's start in 2005. The shortfall between TMF revenues and OffPeak gate costs was $52.3 million in 2010.'
PierPass said the 'immediate effect of opening the night shifts was to spread the same amount of volume over twice the number of hours. In addition, nighttime labor rates are significantly higher than daytime rates.'
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The goal of the program was to shift about half of cargo moves to nights and weekends, and it has been effective in that regard — too effective in fact. PierPass President Bruce Wargo said 55 percent of cargo not exempt from the fee has moved to off-peak shifts.
'It is clear that absent some action, TMF revenue will continue to fall short of OffPeak gate costs and endanger the program,' he said. 'While OffPeak was never intended to be a profit-making venture, the terminal operators can't continue sustaining operational deficits at the current levels.'
PierPass said that beginning in mid-2012, the fee will be adjusted annually based on changes in Pacific Maritime Association maritime labor costs. The PMA is the body that negotiates labor contracts on behalf of U.S. West Coast terminal operators.