By Mark Edward Nero
On July 8, the 13 marine terminal operators at the Los Angeles-Long Beach port complex announced a 1.9 percent increase in the traffic mitigation fee at the ports. Beginning Aug. 8, the container fee will be $70.49 per twenty-foot equivalent unit or $140.98 per forty-foot container.
The increase goes toward sustaining continued operation of off peak gate hours amid labor cost increases, according to the terminal operators collective.
The adjustment falls under the rules of the West Coast Marine Terminal Operator Agreement, which state that the container fee shall be adjusted annually to reflect increases in labor costs based on maritime labor cost figures.
The Pacific Maritime Association negotiates and administers maritime labor agreements with the International Longshore and Warehouse Union.
PierPass, a not-for-profit company created by marine terminal operators at the LA and Long Beach ports to address multi-terminal issues such as congestion, air quality and security, launched the off peak hours program in 2005 to reduce cargo-related congestion on local streets and highways around the ports.
The “OffPeak” program established regular night and Saturday work shifts to handle trucks delivering and picking up containers at the 13 container terminals in the two adjacent ports.
Using a congestion pricing model, PierPass charges a fee on weekday daytime cargo moves to incentivize cargo owners to use the OffPeak shifts. The fee also helps pay for the labor and other costs of operating the OffPeak shifts.
According to an analysis by maritime industry consultants SC Analytics, the costs incurred by the terminals to operate the OffPeak shifts in 2015 totaled $236.2 million. During the year, the terminals received $168.9 million from the traffic mitigation fee, offsetting only part of the OffPeak program’s costs.
Since 2005, OffPeak has taken more than 35 million truck trips out of daytime Southern California traffic and diverted them to less congested nights and weekends. About half of all port truck trips now take place during the OffPeak shifts, according to terminal operator data.