Subscribe to our free, weekly email newsletter!

PierPass raises fee at ports of LA/Long Beach

“While the economy has moved out of the abyss of 2008, we are still in a recovery mode,” said Bruce Wargo, president of PierPass, the non-profit formed by WCMTOA in 2005 that runs the OffPeak program
By Patrick Burnson, Executive Editor
June 07, 2011

In a move to contain costs and sustain service, the West Coast MTO Agreement (WCMTOA) today announced it will raise the current Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach.

“While the economy has moved out of the abyss of 2008, we are still in a recovery mode,” said Bruce Wargo, president of PierPass, the non-profit formed by WCMTOA in 2005 that runs the OffPeak program.

In an interview with LM, he noted that the price point will be raised to $60 per twenty-foot equivalent unit (TEU) in order to sustain continued operation of PierPass OffPeak gates. The TMF adjustment is effective July 4, 2011.

“Things are really getting better at LA/Long Beach,” he said, “and we feel that Southern California will be the premier destination for ocean cargo from Asia for years to come.”

A similar insight was shared with readers in LM recently.

Wargo noted that is the first increase in the TMF since 2006. Since then, hourly labor costs have increased 31 percent. The terminals have operated the OffPeak gates at a loss since the program’s start in 2005. The shortfall between TMF revenues and OffPeak gate costs was $52.3 million in 2010.

Adding the night shifts in 2005 substantially increased costs for terminal operators. The immediate effect of opening the night shifts was to spread the same amount of volume over twice the number of hours. In addition, nighttime labor rates are significantly higher than daytime rates.

“It is clear that absent some action, TMF revenue will continue to fall short of OffPeak gate costs and endanger the program,” said Bruce Wargo, president of PierPass, the non-profit formed by WCMTOA in 2005 that runs the OffPeak program. “With 55 percent of non-exempt cargo movements taking place during OffPeak hours, the program has become an important element of port operations.”

A number of options were evaluated by marine terminal operators to cut the losses, including adjusting the rate, decreasing the services offered, or instituting a fee on OffPeak cargo. Adjusting the rate was determined by the marine terminal operators to be the most effective and least disruptive way to reduce the losses.

“While OffPeak was never intended to be a profit-making venture, the terminal operators can’t continue sustaining operational deficits at the current levels,” Wargo added.

Beginning in mid-2012, the TMF will be adjusted annually based on changes in Pacific Maritime Association maritime labor costs.

For related articles click here.

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Kurt Nagle, president and CEO of the American Association of Port Authorities recently voiced his endorsement of this trade legislation

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

Article Topics

News · Ocean Freight · Ocean Cargo · World Trade · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA