PierPass increases traffic mitigation fee to $50 per TEU
Starting April 3, beneficial cargo owners moving containers in and out of the ports of Los Angeles and Long Beach during daytime weekday hours will be charged $50 per TEU, rather than the $40 they had been charged since July 2005 under an extended gate hours plan.
PierPass, the administrative organization set up by terminal operators in Los Angeles and Long Beach to collect the fees, announced the change Friday, saying an audit of the program showed that the fee should be raised to cover the operators’ actual costs.
The fees are used to finance the labor, operational and administrative costs of the OffPeak night gate and Saturday gate operations at the two ports. PierPass said in a statement that it will regularly review the program costs and adjust the traffic mitigation fee as needed.
The first audit, conducted by industrial engineering firm the JWD Group, found that the initial fee wasn’t sufficient, PierPass President and Chief Executive Officer Bruce Wargo said. He added that the initial $40-per-TEU rate was based on a 2004 market analysis and in-depth consultation with marine terminal management, and was the best estimate possible in the existing business and trade environment.
For terminal operators, the program has been successful, as roughly one-third of all containers are now being moved at off-peak hours, compared to 10 to 15 percent before PierPass came into effect.
But for some shippers, as well as port drayage companies and their drivers, the program has yet to provide all it promised.
“The principal benefit promised to drivers from the establishment of PierPASS’ OffPeak program was the opportunity to make more turns at less congested night gates,” according to a trucker survey released last week by Stonebridge Associates on behalf of the California Trucking Association.
“That promise has yet to materialize. This second driver survey showed that drivers who serve night gates are not getting any additional turns. In fact, drivers who work the maximum of four night gates per week make significantly fewer turns than the average.”
According to the survey, 40 percent of drivers refuse to work nights and 41 percent refuse to work Saturdays.
“The most prominent objection continues to be that night and Saturday schedules prevent drivers from being with their families during the hours their families’ normal activities are scheduled,” the report said.
While the Waterfront Coalition (an advocate for large U.S. retail importers) backed the extended hours plan, smaller importers have said the fee puts too much pressure on profit margins for companies that don’t have the financial leverage to move containers at night to distribution centers.
Meanwhile, most drayage firms are charging shippers a fee smaller than the PierPass fee to move and store containers at night, a fee that might go up with the increased PierPass fee.
Additional information on the PierPass fee adjustment may be found in the document “TMF Adjustment Overview” available on the PierPASS Web site, http://www.pierpass.org.