Clean truck fees and other port charges in Southern California are hastening the diversion of cargo to ports in the Pacific Northwest and the East Coast.
"Everyone is in a fight for survival. Fifty dollars makes a difference in today's economy," David Arsenault, vice president and regional manager of Hyundai Merchant Marine, told the annual Town Hall transportation meeting at California State University in Long Beach.
The ports of Los Angeles and Long Beach on Feb. 18 began collecting a $35 per-TEU clean-truck fee on non-compliant trucks calling in the harbor as part of the ports' Clean Air Action Plan.
The new fee is in addition to existing charges such as the Alameda Corridor and PierPass extended gate fees. If shippers had to pay all of the existing and planned port fees in Southern California, the cost of shipping a container through Los Angeles-Long Beach would increase by as much as $200.
Furthermore, all modes of transportation must introduce lower-emission vehicles and cargo-handling equipment into their operations in order to meet strict pollution standards in the ports' clean-air plan.
This layering of costs is making Los Angeles and Long Beach, already the costliest ports in the country, even more costly for carriers and cargo interests, said Patty Senecal, director of California government affairs at the International Warehouse Logistics Association.
While California is the unquestioned leader in pursuing green initiatives, "there is a price for being first," she said. Before promulgating any new environmental restrictions, the ports and state regulators were urged to carefully balance the costs and benefits of their actions. "Slow down and get it right," Senecal said.
Being the high-cost port complex is without question causing cargo interests and carriers to divert business to other ports. Beginning May 1, a service operated by Maersk Line with 6,000-TEU ships will leave Southern California and will call in Seattle, said Alan McCorkle, senior vice president at Maersk's sister company APM Terminals Pacific Ltd.
The layering impact of fees, plus the hidden costs involved in hiring staff to track and manage all of the fees, have resulted in Los Angeles and Long Beach losing their position as the preferred gateway for imports in the trans-Pacific trades, said Dan Meylor, Customs administrative manager at Carmichael International Service.