It appears the ports of California are on the verge of adopting a policy that will automatically increase costs for their tenants and customers on an annual basis. Proposed by the California Association of Port Authorities, a new annual general rate increase would automatically increase various rates on port tenants every year without public debate, and without regard to the economy, state of the industry, impact on competitiveness or financial standing or needs of a port authority.
The proposal comes at a time when California ports already are losing market share.
The Port of Long Beach conducted a “study session” about the proposed annual rate increase at a recent Harbor Commission meeting. Based on the tortured and disjointed rationale posed by one member of the Harbor Commission in support of the policy change, the ports owe their customers an apology — or at least a better explanation.
The commissioner’s supportive comments for the GRI ranged wildly from a discussion on hydrogen trucks, misstating California Air Resources Board regulatory requirements for ocean carriers to stating that the proposal will allow the port to raise revenue, allowing it to enter into “partnerships” with its marine terminal tenants and other segments of the supply chain by providing those entities with “incentives.”
Perhaps what he was trying to say was that the Port of Long Beach is short on cash. If that’s the case, then that should prompt an entirely different discussion, including a review of the port’s financial situation. Unfortunately, under the CAPA proposal, the port’s financial situation is completely irrelevant.