Chairmen Cordero, Commissioner Dye
Good morning,
We were disappointed to learn that the WCMTOA group made the decision to increase the TMF fee this summer. Based on feedback from our member companies, we continue to believe that the original benefits of pier pass have been surpassed by the negative unintended consequences of pier pass. Through our own investigations and based on what we have learned while participating on the FMC Supply Chain team we see the Pier Pass as a contributor to the inefficiency in the west coast ports and one of the key drivers for the lack of duel transaction moves.
While we do believe it was beneficial when it was first started we believe that there is a need for a revised pier pass 2.0 that can leverage new technology and help to promote efficiency in the west coast ports. We see this as a critical step more important than passing on increased fees to shippers.
We hope the FMC can continue to challenge the port operators to revise pier pass to bring increased value to shippers in aiding productivity and ease congestion, vs. the current trend of continued fee escalation without any improvement in service.
NEWS FLASH: L.A./Long Beach terminal operators to increase Traffic Mitigation Fee
Terminal operators at the Ports of Los Angeles and Long Beach announced an increase to the Traffic Mitigation Fee, which is collected on cargo moving through terminals during peak hours.
BY CHRIS DUPIN |SATURDAY, JULY 09, 2016
Marine terminal operators at the Ports of Los Angeles and Long Beach revealed Friday they will increase the Traffic Mitigation Fee (TMF), which is charged to shippers moving cargo through terminals during the day.
The 13 terminals, members of the West Coast Marine Terminal Operators Agreement (WCMTOA), will increase the fee by 1.9 percent effective Aug. 8, from $69.17 per TEU to $70.49 per TEU, or $140.98 per FEU.
Under the so-called PierPass “OffPeak” program, which began in 2005, the TMF funds are used to subsidize operations at the terminals at night and on weekends when no TMF is collected.
The fee on daytime cargo moves and uncharged nighttime moves has provided an incentive for shippers to shift about half the cargo moving through the two ports to do so at night, relieving highway congestion and pollution.
In mid 2012, WCMTOA said it began adjusting the fee annually “to reflect increases in labor costs based on Pacific Maritime Association maritime labor cost figures.” The Pacific Maritime Association negotiates and administers maritime labor agreements with the International Longshore and Warehouse Union.
WCMTOA said PierPass does not make money from the TMF and the fee only offsets part of the cost of operating terminals at night.
“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,” WCMTOA said. “During the year, the terminals received $168.9 million from the Traffic Mitigation Fee, offsetting only part of the OffPeak program’s costs.”
Mario Cordero, the chairman of the Federal Maritime Commission, toldAmerican Shipper earlier this year that his agency is studying the Pier Pass program because of complaints from the shipper community.
The fee was originally $50 per TEU and was increased in August 2011 for the first time to $60 per TEU. WCMTOA then decided to adjust the fee in smaller increments annually.
Cordero said he agrees PierPass has met its goals of reducing traffic during the day, but said there is a need to examine whether the program has maximized its potential and if ports in Southern California or other parts of the country need to move toward operating 24 hours a day, seven days a week.
