The five-members of the Federal Maritime Commission on Wednesday are set to discuss plans by terminal operators at the Southern California ports of Long Beach and Los Angeles to implement a $10-per-TEU increase on the PierPass Traffic Mitigation Fee (TMF).
Last month, members of the West Coast Marine Terminal Operators Agreement, which formed PierPass six years ago, said they would delay the previously scheduled July 4 implementation of the TMF hike until Aug. 1. The increase would be the first since PierPass started.
The delay, according to the WCMTOA, "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."
The FMC has agendized a closed-session staff briefing and discussion of the topic for the July 13 meeting.
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 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 operating 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 major concern among many in the industry is that the TMF has never fully covered the terminal operators' costs to run the extra gate shifts.
According to WCMTOA members, in 2010 there was a $52.3 million shortfall between TMF revenues and the costs of running the off-peak gates.
The additional $10-per-TEU TMF increase, based on current PierPass volumes, would only generate enough revenue to cover between 50 and 60 percent of the shortfall experienced in 2010.
The July 13 FMC meeting will also be the second for former Port of Long Beach Harbor Commissioner Mario Cordero, who was sworn in as the newest FMC commissioner on June 3.
