Harbor Trucking: PierPass fee hikes drive away business

The traffic mitigation fee (TMF) at the ports of Los Angeles and Long Beach, California, will increase by 4.2% on Aug. 1.

The adjustment matches the combined 4.2% increase in longshore wage and assessment rates that take effect in early July, according to the West Coast MTO Agreement (WCMTOA), which announced the increase Tuesday.

Beginning Aug. 1, the TMF will be $33.47 per twenty-foot equivalent unit (TEU) and $66.94 for all other sizes of container. 

The WCMTOA said the TMF helps offset the cost of operating extended gate hours. Labor costs are the largest single cost component of longer gate hours, it said.

But Harbor Trucking Association (HTA) CEO Weston LaBar said the price increase could drive away more business.

“While the HTA appreciates the willingness of PierPass to adopt a new model and understands the costs they need to cover, we as a gateway need to reassess how we do business to lower any cost burdens for shippers to use our ports. The death-by-a-thousand-fees approach has hurt our gateway by driving away business, resulting in a 19.4% loss in market share for the West Coast container ports since 2006,” LaBar said.

“All of us lose when cargo goes elsewhere and the increase in the TMF, coupled with existing fees and new fees such as the clean truck rate, are creating a cumulative cost that some shippers aren’t willing to pay,” he said.

The WCMTOA manages the PierPass appointment-based system for its members operating at 12 container terminals at the ports of LA and Long Beach. 

The PierPass OffPeak program, which was designed to reduce cargo-related congestion and air pollution around the ports, provided regularly scheduled night or Saturday shifts to handle trucks delivering and picking up containers at the 12 terminals.

Nearly half of all port truck trips now take place during the off-peak shifts, the WCMTOA said.

PierPass 2.0 went into effect in 2018 and a flat fee per TEU was charged no matter when a trucker came to the terminals. Prior to that, shippers were incentivized to have their truckers pick up containers at night with the waiving of the TMF.

LaBar said the HTA has “advocated for a minor update to the PierPass program that should promote night-side transactions, alleviate stress from appointment systems and decrease overall cost for shippers.”

“We believe there should be a provision that incentivizes nighttime peel-off by eliminating the TMF for those transactions,” he said. “We’ve been told that peel-off is a desirable method of cargo delivery for most terminals when the stowage of the ship is conducive. It has a positive effect on driver productivity and would help entice large importers with a tangible value proposition.

“Rising tides lift all boats. Rising costs will sink our ships,” LaBar said.

The WCMTOA said an SC Analytics report showed the net costs incurred by the terminals to operate the off-peak shifts in 2019 totaled $262 million. During that year, the terminals received $223 million from the TMF, offsetting about 85% of the OffPeak program’s costs, it said.

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Click for more FreightWaves/American Shipper articles by Kim Link-Wills.