The FMC agreement would allow two ports to discuss congestion issues.
The Port of Long Beach harbor commissioners directed staff to prepare a draft discussion agreement with the Port of Los Angeles to be filed with the Federal Maritime Commission with the goal of improving the competitiveness of the two ports by addressing “port congestion, truck turn times, limited gate hours of operation, chassis, and the PierPass Traffic Mitigation Fee.”
Rich Dines, the commissioner who introduced the measure, said he believed the agreement was necessary so that the port could discuss these issues with Los Angeles.
“To me, it is very historic because these two ports have been so distant, yet we are so close and share so many of the same challenges. For us to move in the direction of having a discussion agreement, I think it is international news,” he said.
He noted that the Blue Ribbon Commission suggested the two ports merge in 2020. “I don’t know anyone here who would agree with that idea,” but he said the mayors of both cities had urged collaboration.
“This is an opportunity for the two ports to sit in the same room and talk about the challenges,” he said.
Doug Drummond, the president of the commission, noted that the port faces challenges from the increased size of ships.
“Admittedly, we need to improve our throughput,” he said. “This is about collaboration with Los Angeles in a very positive way.”
Dominic Holzhaus, a city attorney for the harbor department, said the agreement would allow discussion of a concept of joint powers authority between the two ports to address issues.
In approving the motion, Commissioner Lori Ann Farrell said the board was not making a determination about what the issues are, and that it was not a “witch hunt” to point in one direction. She said she wanted a robust discussion about chassis.
Dines said the commission has received a lot of correspondence about PierPass, but that the port has no control over the program.
“All of these issues are front and center,” said Jon Slangerup, the chief executive officer of the Port of Long Beach, noting that discussions about port congestion were the subject of a hearing that the Federal Maritime Commission held in Los Angeles last week. The agency also talked about it at the Intermodal Expo conference this week in Long Beach.
Alex Cherin, the executive director of the Harbor Trucking Association, said he saw creation of a discussion agreement as the “next logical step” in allowing the ports to address head on the issues that cause port congestion.
Bruce Wargo, president and CEO of PierPass, said marine terminal operators are concerned about comments made at the FMC hearing last week advocating 24-7 operations of terminals and replacing PierPass with some other sort of port-operated program.
“Mandating substantially higher terminal operating costs without obvious benefit or without due diligence necessary to make such a policy would be disastrous,” he said. “We are talking about adding $100 million of costs to terminal operators, per year, mostly ILWU payroll.”
He noted that empty containers and intermodal cargo are exempt from PierPass, and that adding costs to the movement of discretionary cargo could result in cargo diversion to other ports.
He said PierPass has looked into the added cost of working around the clock and found it would add an additional $167 million over the current off-peak cost of $180 million. He said it was difficult to understand why the port was not going to its terminal operator customers first before exploring the discussion agreement.
Port of Long Beach plans discussion agreement with Port of Los Angeles
