Coalition of shipper, transport groups oppose container tax

The South Coast Air Quality Management District proposed a tax on container shipments to fund incentives for further reducing ozone levels.

   About 100 groups representing shippers, distributors, transportation and logistics business have told the South Coast Air Quality Management District (SCAQMD) in California that they oppose its plans to impose a tax on container shipments.   
   The SCAQMD proposed the tax to fund incentives for further reducing ozone levels.
   The SCAQMD is the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside counties. It includes the container ports in Los Angeles and Long Beach, and the so-called “Inland Empire” where many warehouse and distribution centers are located.
   “It is our understanding that the SCAQMD has proposed two container tax proposals this year – one for $35 per TEU, which was presented to legislators in Sacramento earlier this year as part of an effort to raise $385 million per year, and a $100 per TEU tax, which was recommended by the SCAQMD Legislative Committee, which will reportedly raise $1.1 billion per year,” the groups said in a letter to SCAQMD Chairman William A. Burke. “How these funds will be collected and what programs they would fund are ill defined, and any analysis on how such fees would impact local businesses and California’s ports as trade gateways is nonexistent.”
   In its draft funding plan, the SCAQMD said the $35 per TEU fee could be used “to help fund deployment of near zero and zero emission trucks operating in and out of the ports,” and for cargo handling equipment at the port, as well as incentives for cleaner vessels and locomotives.
   “It is our strong belief that the container tax proposals sought by the SCAQMD present significant legal issues and were drafted without any consideration as to the impact that the tax would have on jobs or port competitiveness,” the letter said. “The lack of analysis and lack of outreach to the trade community is troubling and discouraging. Past efforts have repeatedly failed due to the serious economic injury such a tax would cause California. It is for these reasons that we urge you to reconsider your position and efforts in Sacramento to implement a container tax.”
   The Pacific Merchant Shipping Association said in its March West Coast Trade Report newsletter that the $100 per TEU fee proposed by the SCAQMD Legislative Committee would also be imposed on shipments moving through the Port of Oakland.
   On March 3, the SCAQMD adopted a “comprehensive clean air blueprint” that it said would improve the health and lives of all residents across its region by reducing ozone and particulate matter emissions as required by the federal Clean Air Act.
   The blueprint was forwarded to the U.S. Environmental Protection Agency after being adopted by the California Air Resources Board.
   Sam Atwood, a spokesman for the SCAQMD, said the plan seeks to reduce ozone to 80 parts per billion by 2023 by reducing emissions of nitrogen oxides (NOx) by 45 percent from current rules and regulations, and an additional 10 percent reduction in NOx to meet a requirement to reduce ozone to 75 parts per billion by 2031.
   He said the goals are extremely challenging and that SCAQMD’s analysis said it will take $1 billion per year over the next seven to 15 years.
   The proposed container fee is contained in a separate “Funding Action Plan” that identifies about two dozen possible ways to fund the goals set out by the SCAQMD, Atwood said. He noted how the container fee is a “concept” and “there is no proposed legislation which would be needed at a state level to enact it.”
   The SCAQMD said the amount of funding needed to achieve the NOx emission reductions associated with the further deployment of cleanest engine technologies proposed in California’s “mobile source strategy” and its air quality management plan is “on the order of $1 billion per year if funding is available beginning in 2017.”
   Atwood said the SCAQMD may provide funds to create incentives to replace older, dirtier trucks, particularly those used to dray containers to and from the ports; increase the number of ships that are “cold ironing” or using shore power when in port; and to fund so-called “sock on a stack” systems, where exhaust fumes from ships are captured and cleaned while they are docked.