U.S. port officials in the Pacific Northwest, saying higher taxes are partly behind the loss of business to Canada, are urging grain shippers to support efforts to change federal cargo fees.
Vince Sullivan, business development manager at the Port of Tacoma, Wash., told the Midwest Shippers Association the Harbor Maintenance Tax is inequitable because the maintenance dredging it supports largely goes to East and Gulf coast ports. Seattle and Tacoma, he said, have naturally deep harbors so they do not have to tap into the fund.
Mark Wen, inland cargo business and development manager at the Port of Seattle, said the fee, 0.125 percent of the value of the cargo, adds $250 to the cost of shipping a container carrying cargo with a value of $200,000, and $625 to a container with cargo value totaling $500,000.
The diversion of container traffic to Canada is one issue, the port officials said, that threatens to strain capacity for grain exporters in the Upper Midwest. The West Coast’s potential loss of market share to other North American ports, they said, will leave fewer containers available to agriculture shippers.
“Exporters should care about this,” Wen told the annual meeting of the Midwest Shippers Association this week.
West Coast ports have seen their share of imports from Asia slip over the past decade due to a proliferation of all-water services to the U.S. East Coast. The opening of Prince Rupert on Canada’s Pacific Coast in 2007 caused a further diversion of cargo. Canadian National Railway offers direct intermodal rail service from Prince Rupert to Chicago and Memphis.
Containers that enter the U.S. through Prince Rupert and the East Coast exit through those ports as well and are therefore not available for grain exporters in Minnesota, Iowa, the Dakotas and eastern Montana, said Sullivan.
Moving empty containers from the East Coast to the upper Midwest is costly. Ocean carriers are always looking for the least expensive way to re-use their equipment, so imported containers that move to retailers’ facilities on the East Coast may be filled with exports destined for Europe, Latin America or Africa, but “they won’t go the Midwest,” Sullivan said.
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