Port of Los Angeles unveils incentive program for ocean carriers

In a move geared towards bringing more volume to the Port of Los Angeles (POLA) in 2014, the Los Angeles Board of Harbor Commissioners said yesterday it has signed off on an incentive program that will reward shipping lines bringing new container business into POLA.

By ·

In a move geared towards bringing more volume to the Port of Los Angeles (POLA) in 2014, the Los Angeles Board of Harbor Commissioners said yesterday it has signed off on an incentive program that will reward shipping lines bringing new container business into POLA.

Entitled the Ocean Common Carrier Incentive Program, POLA officials said that participating ocean carriers will earn $5 per Twenty-foot Equivalent (TEU) for each incremental container it ships through the port in calendar year 2014, with the rate heading up to $15 per TEU for all TEU if a carrier’s container volume increases by 100,000 or more units for the same 12-month period. 

In terms of measuring volume increases, port officials explained that the baseline for measuring volume is the number of containers each carrier moved through the port in calendar year 2013, with carriers receiving their incentive in the form of a lump-sum payment in early 2015.

“Carriers are rethinking their routes and relationships to be as competitive as possible,” said POLA Executive Director Geraldine Knatz, Ph.D., in a statement. “This incentive gives them another reason to strengthen their ties with the Port of Los Angeles.”

And with Trans-Pacific trade activity expected to rise, POLA said that global shipping is in the middle of various changes, with carriers revisiting the traditional business model of calling at a dedicated marine terminal.

The rollout of this program comes at a time when POLA continues to feel the effects of volumes being been negatively impacted due to a new service line between ocean carriers MSC and CMA CGM that moved from POLA to neighboring Port of Long Beach having recently commenced, with both carriers having established hubs at POLB, with vessels calling on POLB. MSC is sharing a POLB hub with COSCO and MSC is in a terminal sharing arrangement with Hanjin at POLB.

“This is something that will keep us competitive and hopefully one step ahead of the competition,” said POLA Director of Communications Philip Sanfield. “We are pretty excited about it and hope it results in some additional incremental cargo in 2014.”

An article in the Orange County Register quoted Michele Grubbs, vice president of the Pacific Merchant Shipping Association as saying the Ocean Common Carrier Incentive Program has decent potential

“The Port of Los Angeles understands the competition is fierce and they want the customers to bring the cargo to their port,” Grubbs said. “They are making it more attractive to choose their port with this incentive program.”


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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!

Latest Whitepaper
Face security threats head-on. Protect data beyond perimeter.
Traditional Data Loss Protection (DLP) solutions present a number of serious shortcomings and challenges for companies deploying them, creating a clear gap in the market.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Securing IoT data across the connected supply chain
Learn why a holistic approach to IAM is the most effective way to govern access to your systems and information requested by your partners, vendors, customers, and connected devices.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...