Terminal operators at the Ports of Los Angeles and Long Beach announced an increase to the Traffic Mitigation Fee, which is collected on cargo moving through terminals during peak hours.
Marine terminal operators at the Ports of Los Angeles and Long Beach revealed Friday they will increase the Traffic Mitigation Fee (TMF), which is charged to shippers moving cargo through terminals during the day.
The 13 terminals, members of the West Coast Marine Terminal Operators Agreement (WCMTOA), will increase the fee by 1.9 percent effective Aug. 8, from $69.17 per TEU to $70.49 per TEU, or $140.98 per FEU.
Under the so-called PierPass “OffPeak” program, which began in 2005, the TMF funds are used to subsidize operations at the terminals at night and on weekends when no TMF is collected.
The fee on daytime cargo moves and uncharged nighttime moves has provided an incentive for shippers to shift about half the cargo moving through the two ports to do so at night, relieving highway congestion and pollution.
In mid 2012, WCMTOA said it began adjusting the fee annually “to reflect increases in labor costs based on Pacific Maritime Association maritime labor cost figures.” The Pacific Maritime Association negotiates and administers maritime labor agreements with the International Longshore and Warehouse Union.
WCMTOA said PierPass does not make money from the TMF and the fee only offsets part of the cost of operating terminals at night.
“According to an analysis by maritime industry consultants SC Analytics, the costs incurred by the terminals to operate the OffPeak shifts in 2015 totaled $236.2 million,” WCMTOA said. “During the year, the terminals received $168.9 million from the Traffic Mitigation Fee, offsetting only part of the OffPeak program’s costs.”
Mario Cordero, the chairman of the Federal Maritime Commission, told American Shipper earlier this year that his agency is studying the Pier Pass program because of complaints from the shipper community.
The fee was originally $50 per TEU and was increased in August 2011 for the first time to $60 per TEU. WCMTOA then decided to adjust the fee in smaller increments annually.
Cordero said he agrees PierPass has met its goals of reducing traffic during the day, but said there is a need to examine whether the program has maximized its potential and if ports in Southern California or other parts of the country need to move toward operating 24 hours a day, seven days a week.
L.A./Long Beach terminal operators to increase Traffic Mitigation Fee next month
