Tuesday, June 28, 2011

SoCal PierPass Fee Increase Delayed Until August

Terminal operators at the Southern California ports of Long Beach and Los Angeles on Monday said that they will delay the implementation of a $10-per-TEU increase on the PierPass Traffic Mitigation Fee (TMF) by about a month.

According to members of the West Coast Marine Terminal Operators Agreement, which formed PierPass six years ago, the delay "is in response to feedback from customers and other partners in the goods movement industry, and is intended to provide more time for cargo owners to prepare for the adjusted TMF."

Three weeks ago WCMTOA announced that effective July 4 it would increase the TMF from $50-per-TEU to $60-per-TEU, the group's first announced increase in the TMF since 2006.
The delay will now see the fee increase take effect on August 1.

PierPass is a not-for-profit company created by marine terminal operators at the ports of Los Angeles and Long Beach in 2005 to address multi-terminal issues such as congestion, security and air quality. Under PierPass, all international container terminals at the two Southern California ports established five new off-peak hour terminal gate shifts per week.

As an incentive to lure users into using the off-peak gates and to cover the labor costs of the added gate shifts, PierPass charges the TMF against most cargo movement during peak gate hours of 3 a.m. to 6 p.m., Monday through Friday. These collected peak-hour fees are then used to offset the costs of the off-peak gate shifts.

Currently, about 55 percent of all drayed container traffic moving in and out of Los Angeles and Long Beach terminals is handled during the off-peak gate shifts.

A lingering concern for the WCMTOA members is that the TMF has never fully covered the terminal operators' costs to run the extra gate shifts. According to WCMTOA members, the shortfall between TMF revenues and off-peak gate costs in 2010 was $52.3 million. Based on recent PierPass numbers, the additional $10-per-TEU TMF increase would only generate enough revenue to cover between 50 and 60 percent of the shortfall experienced in 2010.