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.