Ocean shipping: Port of Long Beach delays cargo fees
Patrick Burnson, Executive Editor -- Logistics Management, 12/2/2008
LONG BEACH, Calif.—Shippers reliant on the nation’s biggest ocean cargo gateways are getting a reprieve of sorts as Port of Long Beach officials announced that its much maligned “Infrastructure Cargo Fee” is being placed on hold for at least the next six months.
In the coming weeks, the Los Angeles Board of Harbor Commissioners is expected to approve a similar six-month delay.
“Because of the extra time needed to complete the planning and approval process for these many projects, the ports felt it was sensible to delay the implementation of the fee,” said Port of Long Beach deputy executive director J. Christopher Lytle. “We'll reassess the situation in six months to see it if makes sense to start the fee then.
In recent weeks LM was told by port authorities at rival West Coast gateways that such a fee would be regarded as “punitive” by shippers who would soon be searching for alternatives.
Originally scheduled to begin January 1, 2009, the “fee” of $15 per 20-foot-long shipping container ($30 for a 40-footer) was established in January 2008 by harbor commissioners of the ports of Long Beach and Los Angeles.
In mid-year 2009, the Long Beach Board of Harbor Commissioners plans to re-examine the status of the projects, which include upgrades to the ports’ rail network, replacement of the Gerald Desmond Bridge and other improvements that will facilitate traffic flow through the ports. The fee, collected by both ports, will generate $1.4 billion. Along with matching funds from the statewide transportation measure Proposition 1B, about $3 billion worth of transportation projects are planned for the harbor area.
The Infrastructure Cargo Fee is planned to last seven years, and each year the fee will fluctuate from about $10-to-$18 per 20-foot container, depending on the construction costs expected to be incurred in that calendar year.
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