Cargo movers face
$150M in new fees
The money will pay for
a new program created to
reduce traffic and air pollution
LONG BEACH, Calif. >> Cargo operations at the nation's largest port complex will be extended to nights and weekends under new initiatives aimed at reducing traffic jams and air pollution, terminal operators said yesterday.
A coalition of marine terminal operators and the ports of Los Angeles and Long Beach developed the program, slated to launch in November, to pre-empt state lawmakers from forcing potentially costly changes at the ports.
To pay for the costs of operating the terminals for extended hours, cargo owners will be assessed fees projected to amount to more than $150 million a year for three years.
The fees are projected to be phased out after three years, when the volume of cargo at the port will have grown enough to offset the cost of the extended hours.
By opening the ports' cargo facilities during off-peak hours, terminal operators say there will be fewer trucks on the area's freeways during rush hour. With less congestion, trucks will spend less time idling and that should help reduce air pollution.
A new company, PierPass Inc., will administer the program and collect the fees from cargo owners, who will be charged $20 for every 20-foot cargo container and $40 for 40-foot containers.
Those who opt to move their goods through the ports during off-peak hours will have the fee refunded.
Extended hours will initially be Saturdays while the program is phased in over six months.
It remains to be seen whether shippers will make the necessary adjustments, such as operating warehouses and distribution centers during evenings and weekends.
Currently, about 17 percent of all the port cargo moves at off-peak hours. But that is mostly cargo controlled by the larger importers, who specifically order and pay for cargo operations to be conducted after hours.
The new initiative would eventually make such off-peak cargo operations the norm.
Some large shippers, like Target Corp., are supporting the new program. "No one likes to see transportation costs increase," said Rick Gabrielson, senior manager for import operations at Target.
Target has been conducting its cargo operations during off-peak hours for some time, Gabrielson said. More than 30 percent of the company's cargo operations already occur either at night or weekends.
Switching operations can be difficult, but Gabrielson urged shippers to follow suit.
"Doing so will help ensure the future success of the ports and our community," he said.
Jon Hemingway, chairman of the terminal operators group that developed the program, said the timetable was dependent on the ports resolving their current labor shortage.
