West Coast ports hike OffPeak gate charges

Marine terminal operators in Los Angeles and Long Beach have raised the traffic mitigation fee to US$60 per TEU to sustain the continued operation of off-peak gate movements.


The adjustment was imposed at the weekend and is the first increase in the traffic mitigation fee (TMF) since 2006, the ports said.


In a statement, the ports said hourly labour costs have increased by 31 percent since 2006, and that the terminals have operated the OffPeak gates at a loss since the programme’s start in 2005.


The shortfall between TMF revenues and OffPeak gate costs was $52.3 million in 2010. Adding the night shifts in 2005 substantially increased costs for terminal operators. The immediate effect of opening the night shifts was to spread the same amount of volume over twice the number of hours. In addition, nighttime labour rates are significantly higher than daytime rates.


“It is clear that absent some action, TMF revenue will continue to fall short of OffPeak gate costs and endanger the program,” said Bruce Wargo, president of PierPass, the non-profit organization formed by the terminals in 2005 that runs the OffPeak program.


“With 55 percent of non-exempt cargo movements taking place during OffPeak hours, the programme has become an important element of port operations.”


A number of options were evaluated by marine terminal operators to cut losses, including adjusting the rate, decreasing the services offered, or instituting a fee on OffPeak cargo. Adjusting the rate was determined by the marine terminal operators to be the most effective and least disruptive way to reduce the losses.


“While OffPeak was never intended to be a profit-making venture, the terminal operators can’t continue sustaining operational deficits at the current levels,” Wargo added.


Beginning in mid-2012, the TMF will be adjusted annually based on changes in Pacific Maritime Association maritime labour costs.


The OffPeak programme provides value and future growth potential to the goods movement industry, greatly increasing the capacity of America’s largest port complex without requiring additional infrastructure.
(Source:http://www.cargonewsasia.com)