PierPass fee increase takes effect Aug. 1

PierPass fee increase takes effect Aug. 1

Revenue from the traffic mitigation fee is distributed to the 12 terminal operators at Los Angeles-Long Beach to help offset extra costs incurred operating night and weekend gates. Photo credit: Shutterstock.com.

Beneficial cargo owners (BCOs) in Los Angeles-Long Beach beginning Aug. 1 will face a 1.9 percent increase in the traffic mitigation fee (TMF) that supports night and weekend gates in the largest US port complex.

The West Coast Marine Terminal Operators Agreement (WCMTOA) said the TMF will increase to $32.12 per TEU and $64.24 per FEU for non-exempt containers. The TMF is pegged to the International Longshore and Warehouse Union (ILWU) coastwide contract with the Pacific Maritime Association (PMA), and adjusts each summer with changes in the ILWU wage scale and PMA assessments that support benefits.

“It’s a pass-through increase,” John Cushing, PierPass president, told JOC.com Wednesday.

In 2005, Los Angeles-Long Beach became the first port in North America to implement a formal program of extended gates in response to growing cargo volumes, port-generated truck traffic on local freeways, and terminal congestion. The complex handled 17.5 million laden and empty TEU last year, according to port statistics.

The TMF began as an incentive for BCOs to send their trucks to the ports during the 6 p.m.-3 a.m. second shift to avoid heavy traffic during normal daytime hours. Until November 2018, the fee was levied on daytime truck calls, but not against truck calls on the second shift.

“Nearly half of all port truck trips now take place during the off-peak shifts,” WCMTOA said in a statement.

The fee was cut by more than 50 percent last November but is now levied on all non-exempt container moves regardless of the time of day the trucks call at the terminals.

The TMF is not charged on exempt containers. The exempt moves include empty containers, import or export cargo that transits the Alameda Corridor and is subject to a corridor fee, and transshipment cargo. Empty chassis and bobtail trucks are also exempt from the TMF.

Revenue from the TMF is distributed to the 12 terminal operators to help offset extra costs incurred operating night and weekend gates, but it does not cover all costs, according to maritime industry consultant SC Analytics. Net costs incurred by the terminals to operate off-peak shifts totaled $288 million last year, while TMF revenue came in at $217.5 million, SC Analytics said in the WCMTOA statement.

Fee a sore point

The fee has been a sore point for BCOs, who want more transparency on the collection of fees and dispersing the revenue among the terminals. Truckers have complained about logistical issues, such as the truck bunching that used to occur between the end-of-the-day shift at 5 p.m. and the opening of the night gates at 6 p.m. PierPass addressed that problem last year by reducing the TMF and charging it on all non-exempt container moves whether they call during the day or night shifts. 

Cushing told the Propeller Club of Los Angeles-Long Beach in March that truck bunching during the shift changes disappeared with the flat fee.    

Major gateways in North America have wrestled with the implementation of fee-based programs to fund extended gates. As ships get larger and container exchanges during each vessel call increase, a few ports have implemented their own fee-based programs to cover some of the costs terminals incur when they run night and weekend gates. 

Some terminals in Oakland, New York-New Jersey, Montreal, and Vancouver have implemented fees based on their individual needs. 

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.