FMC Chairman Mario Cordero said shippers are complaining about higher PierPass costs and worsening service.
Mario Cordero, chairman of the Federal Maritime Commission, told members of the National Industrial Transportation League this week that one of his top priorities is addressing issues surrounding PierPass, a program that funds night and weekend operations at the container terminals in the ports of Los Angeles and Long Beach through a fee on shippers using the terminals during the day, Monday through Friday.
Speaking at the NIT League’s annual meeting in New Orleans, Cordero said when the FMC authorized members of the West Coast Marine Terminal Operator Agreement (WCMTOA) to come together to resolve congestion issues by creating PierPass a decade ago, the program promised to revolutionize the industry and solve many of the problems faced from both pollution and congestion.
According to a synopsis of his remarks provided by the FMC, Cordero said there is a serious question as to whether PierPass is fulfilling its authorized mission.
He said he has heard from multiple stakeholders that PierPass costs have gone up, while service has gone down.
John Cushing, president of PierPass, said in response that the program has been successful in accomplishing its goal of shifting the movement of containers going to and from marine terminals from daytime hours to night and on weekends.
Today about half of boxes drayed to and from container terminals moves during the day, Monday through Friday, and half between 6 p.m. and 3 a.m. on Saturday. Before PierPass, about 87 percent of containers moved during the day, creating highway congestion and air pollution from idling trucks jamming roadways near the ports.
Those evening and Saturday operations are funded with a traffic mitigation fee which was raised on Aug. 1 from $66.50 per TEU to $69.17 per TEU or $138.34 per 40-foot container.
Cushing said the increase reflects the increased costs to terminals that were incurred because of the new contract negotiated with the International Longshore and Warehouse Union, and he noted that terminals delayed implementing those increases even though the ILWU and employers reached a new contract in February.
Cordero said he has asked PierPass to conduct a third party independent audit several times, adding he wants to resolve what he termed as an environment of distrust and what appears to be a lack of competition created by PierPass’s current practices.
Cushing said PierPass has met with the FMC and publishes an annual financial report and an overview to explain the methodology it uses to determine the amount of the traffic mitigation fee.
Cordero also said the FMC has heard from many importers, exporters, and drayage trucking companies complaining about demurrage and detention charges that must be paid, even though they cannot access their cargo or drop it off in a timely manner, before free time expires.
He said the FMC welcomes shippers to submit documentation and information of unreasonable practices regarding the application of demurrage or detention and said complaints can be filed at the commission that involve alleged violations of the Shipping Act.
The FMC has 125 employees; Cordero suggested as international shipping increases the commission will need to increase its staff to keep pace.
FMC says addressing PierPass concerns a top priority
