California Ports Approve Second Round of Fees for Shippers
Decaying bridges, inefficient highway ramps and narrow roads are all projects the ports of Los Angeles and Long Beach plan to attack with a new $15 per 20-foot container fee approved Jan. 14.
The fee, which goes into effect Jan. 1, 2009, is expected to generate $1.4 billion for infrastructure upgrades needed to make the ports work more efficiently. The fee will rise to $18 a 20-foot container in 2010 and then expire after seven years if all the projects are completed.
“We have identified the projects we want to do, and our fees will pay for only those projects,” said Port of Long Beach spokesperson Art Wong.
The collected fees will be coupled with state funds generated by Proposition 1B to tackle a host of infrastructure problems.
This is the second round of fees approved by the ports’ harbor commissioners.
In December, both ports approved a $35 per 20-foot container fee, or $70 per 40-foot container, to help pay for a $1.6 billion cleantruck program to eliminate all polluting trucks from the ports by 2012. The goal is to eliminate 80 percent of the pollution given off by the trucks. That fee starts June 1.
When both fees are in effect, shippers will be paying an extra $50 per 20-foot container and $100 per 40-foot container to ship their goods through the ports.
Most California apparel manufacturers have been sanguine about the new fees and are factoring it into their cost of doing business. They estimate it will add a few cents to the cost of each garment. “I have no problems with that because it is building up the area to make it a better place for everyone, and that’s a good thing,” said John Poyer, president and chief executive of Topson Downs Inc., a longtime apparel maker and importer that does private-label garments for mass merchandisers and department stores as well as its own labels, Fire and Fire Jeans.
Enrico Salvo, chief executive and founder of Carmichael International Service, a Los Angeles freight forwarder and customs broker that handles many apparel accounts, said his clients haven’t said too much about the fee increases. “Most of the reaction we’ve had so far is, ’We’ll have to take it.’”
But others are not so happy. Erik Autor, vice president and international trade counsel at the National Retail Federation in Washington, D.C., said his organization has serious concerns about this new fee as well as the clean-truck fee.
“[The new fee] is fundamentally unfair,” he said. “The point is this fee only applies to certain kinds of shippers—shippers moving goods by container—and not to shippers moving break bulk or bulk cargo. We don’t think it is fair to basically put the whole burden on one portion of the shipping community.”
He suggested the state set up a toll authority that would collect real-user fees for those using the roads, bridges and railroad lines outside the ports’ immediate borders. The NRF also suggested a gate fee at the terminals to pay for infrastructure inside the ports’ borders.
The infrastructure projects that would be tackled by the recently passed fee include replacing the Gerald Desmond Bridge, connecting downtown Long Beach to Terminal Island, and expanding it from five lanes to six lanes; replacing the Schuyler Heim drawbridge and constructing a four-lane elevated expressway between Ocean Boulevard and Alameda Street at Pacific Coast Highway in Long Beach; constructing a grade separation of the rail line at Fries Avenue in Wilmington; removing the traffic light at Navy Way and Seaside Avenue on Terminal Island; improving access from the Harbor (110) Freeway to the Port of Los Angeles; and upgrading on-dock rail networks at both ports.
The clean-truck fee will fund a program to rid older diesel trucks from picking up cargo at the ports. By 2012, no trucks built before 2007 should be able to call at the ports.
The clean-truck program would help truckers and trucking companies buy new rigs. Right now there are about 14,000 independent truckers who use their own vehicles to collect cargo at the ports.
One question still unanswered is how the ports will collect these new fees from shippers. One option is to use the PierPass system, a computerized system that charges shippers a $50 per 20-foot container fee to pick up cargo during daytime peak hours. Or the ports could devise their own computerized system, port officials said. —Deborah Belgum
