A 2.5 percent increase in
the traffic mitigation charge placed on containers moving through the Los Angeles
and Long Beach ports will be implemented beginning Aug. 1, 2012, the West Coast
MTO Agreement, which administers the fee, has announced.
Starting in August, the
fee will rise to $61.50 per 20-foot-equivalent unit and $123 per forty-foot container,
from the current rates of $60 and $120, respectively.
The WCMTOA, a collective
of terminal operators, says the increase is being put into place in order to address
increases in labor costs that take effect July 1.
The mitigation fee, which
dates back to 2005, helps pay for the night and weekend marine terminal shifts created
by the PierPass OffPeak program to relieve daytime congestion in and around the
ports.
It also provides a financial
incentive to move cargo during less congested times. The fee is charged for non-exempt
containers moving during the peak hours of Monday through Friday from 3 am to 6
pm.
On Aug. 1, 2011, the fee
increased for the first time since 2006. The $10 per TEU upsurge came after hourly
labor costs increased more than 31 percent for the same period. It was at that time
that the WCMTOA announced that beginning in mid-2012 it would begin adjusting the
fee annually to address labor cost increases.
The terminal operators say
they’ve operated the OffPeak program at a loss since the program’s 2005 inception,
when they doubled the number of shifts per week, thereby essentially spreading the
same number of containers over twice the working hours.
The shortfall between traffic
mitigation revenues and OffPeak gate costs was $55 million in 2011 and $52.3 million
in 2010, with cargo volume having been essentially flat since 2005, according to
the terminal operators group.
However, also since 2005,
the PierPass OffPeak program has helped achieve the goal of reducing traffic congestion
in and around the ports during daytime business hours. Off hours gates have grown
to handle about 55 percent of all container traffic at the ports, according to the
WCMTOA.
For more information on
the traffic mitigation fees or PierPass program, visit www.pierpass-tmf.org.
