The Ports of Long Beach and Los Angeles continue to be very active in developing new tariffs, including both rules and fees. The latest proposal, to be considered for adoption Monday, January 14th at a joint meeting of the two port boards, is a long-awaited container fee to fund new infrastructure. The fee would amount to $15 per twenty-foot-equivalent unit (TEU) – or $30 on the forty-foot containers that are most commonly seen. The fee would apply to any loaded container entering or leaving the port by truck or rail, starting January 1, 2009 and ending seven years hence. The fee amount might vary, an aspect that has freight shippers and transporters particularly alert.
The fee is expected to generate $1.4 billion that would go towards new freight-related infrastructure. For example, replacement of the Gerald Desmond Bridge – which links downtown Long Beach to Terminal Island and is so old it’s fitted with cloth nets to catch falling concrete (though I understand it’s safe to drive on!) – would be partly funded with this money. Rail and roadway improvements around the ports would also be funded with this money, which would help provide local matching funds for state bond money approved by voters in November of 2006.
I’m interested to see such a fee finally come forward for adoption. Our own State Senator Alan Lowenthal has tried three times to move a container fee bill through the legislature; twice the bills have been vetoed by the Governor. The Senator continues to work with private sector stakeholders and the Governor’s staff to negotiate an acceptable approach. The Senator’s fee, last proposed at $30 per TEU, would apply to Northern California ports as well and would help fund not only infrastructure but also environmental improvements.
Any state fee would, presumably, simply add on to a local fee adopted by the San Pedro Bay ports. While container fees have found favor with environmental and community groups, private industry has many concerns, including the potential for collected funds to be diverted to other uses (for example, balancing the shaky state budget). One of the most common arguments is that too many local fees will drive business away from Southern California. In my prior position at SCAG, I worked on a consultant study that found that local container fees could go up as high as about $100 per TEU – $200 per forty-foot container – without much risk of diverting business – as long as that money was used to speed the flow of freight through Southern California.
The new port container fee, should it be adopted, will be in addition to the $35 per TEU clean truck fee just adopted in December by both ports. In addition, containers shipped during peak hours (daytime, weekdays) pay a $50 per TEU surcharge to fund night and weekend operations under the PierPASS OffPeak program. So the local fees are beginning to add up. Fortunately, these newest fees will go directly to an area of great need: improved infrastructure. Even better, the Ports of Long Beach and Los Angeles are investing in the principle recommended by the State of California in its January 2007 Goods Movement Action Plan: “simultaneous and continuous improvement” of both infrastructure and the environment.
