New Jersey’s Assembly has joined the state senate in voting to repeal a Port Authority of New York and New Jersey’s cargo facility charge, which is under attack in a complaint to the Federal Maritime Commission.
The Assembly voted 79-0 Monday against the charge. The bill, aproved by the N.J. Senate in June, goes to Gov. Chris Christie. Repeal also would require action by New York, where similar legislation hasn’t been introduced.
The cargo facility charge is assessed on cargo loaded on or discharged from vessels. The charge is $4.95 per 20-foot-equivalent unit for containers, $1.11 per vehicle, or 13 cents per metric ton for bulk or heavy-lift cargoes.
The charge is designed to cover costs of road and rail projects and post-9/11 security improvements. It replaced an intermodal rail lift fee of $57.50 per container and a volume-based Sea-Link truck registration fee of $2,500 to $10,500 per quarter.
Carriers say competition prevents them from passing the cargo facility charge to shippers and consignees. Maersk Line said last year it had been absorbing $4 million a year in costs from the charge.
“K” Line last year asked a Federal Maritime Commission administrative law judge to allow a full FMC review of the charge so the full commission can consider the case on its merits. “K” Line contends the fee is ian illegal tax on cargo that “if left in place will spawn copycat taxes by other ports.”
New York-New Jersey imposed the charge to recoup infrastructure and security costs, and to encourage use of the port’s ExpressRail intermodal terminals. Port officials said they expected the charge to generate $26 million a year.
Nine container ship lines asked the FMC to declare the CFC illegal on grounds it discriminates among carriers by requiring all of them to pay for facilities, such as ExpressRail, that some may not use, and that it requires terminals to refuse service to carriers that didn’t pay the fee.
During the last two years, all of the carriers but “K” Line have dropped out of the case, which has been bogged down by disputes over voluminous requests for legal discovery of information.
“K” Line last month asked FMC Administrative Law Judge Erin M. Wirth to halt the discovery process and dismiss the complaint on its merits, so that the issue can be decided by the full FMC.