Carriers, shippers say no to Congress on proposed port user fee
Representatives from the container carrier and shipper industries told Congress there’s no need for the implementation of a user fee to pay for port infrastructure and security improvements.
“The government should do nothing,” Robin Lanier, executive director of the Waterfront Coalition, told members of the House Subcommittee on Water Resources and Environment during a Nov. 20 hearing. The coalition represents the users of port services.
Christopher Koch, president and chief executive officer of the World Shipping Council, which represents the international liner carriers, said the maritime industry has “done a good job” financing port infrastructure improvements. “There’s no need for a user fee for this,” he said.
Both industry representatives explained to the House subcommittee that port infrastructure, while always in need of improvement, has traditionally been paid for by the terminal operators and carriers. They recoup some of their costs in the form of rate increases to shippers.
The industry representatives’ remarks follow earlier testimony at the hearing from Reps. Dana Rohrabacher and Doug Ose, both Republicans from California. Each congressman presented separate bills that provide ports with additional infrastructure and security funding streams.
Rohrabacher’s bill, H.R. 3028, would allow local port authorities to use their discretion to levy a fee on containers passing through their ports. Revenue from this fee would be placed in a port authority-controlled fund to cover infrastructure and security improvements.
“Why should all the tens of billions of dollars needed for this upgrading come out of the hide of our own taxpayers? Should the manufacturers in Shanghai not pay a share of the cost through a fee on the containers they send through our well-oiled port facilities?” Rohrabacher said.
Ose’s bill, H.R. 2193, calls for a portion of U.S. Customs duties collected at ports to be dedicated for five years to port infrastructure and security improvements. “The bill includes a funding formula, which is based on the business concept of income (duties collected at the port) minus expenses (federal agency expenditures at the port),” Ose said in his testimony.
“The system we have right now is not working,” Ose added. “We’re trying to change that without adding tax to American business and consumers.”
The American Association of Port Authorities generally supports Ose’s bill. “The bill would allow a portion of Customs duties collected at each port of entry to be returned directly to the port as an entitlement to be used for security enhancements,” said Jean C. Godwin, executive vice president and general council for AAPA.
“Ports have already invested millions of their own dollars in port security since Sept. 11, 2001, and they will not be able to continue to fund the extensive new requirements without increased federal assistance,” Godwin said. “In many cases funds to pay for security are being diverted from other infrastructure improvements necessary to meet the continuing growth in trade, which is expected to double and even triple in certain ports over the next 10 years.”
According to the AAPA, the U.S. public ports spend about $3 billion a year to operate and develop their port facilities.
Instead of congressionally mandated user fees, however, Godwin said the ports would prefer an amendment to section 208 of the 1986 Water Resources Development Act to give them broader authority to levy fees.