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
SaaS Supply Chain Management Systems
A guide to better understanding the market, the software and the benefits
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Digital Evolution: Streamlining Logistics and Supply Chain Operations
In this FREE virtual conference we'll define the challenges facing operations and offer solutions designed to create dynamic, automated networks that offer seamless communication, improved collaborative third-party relationships, and the ability to respond to changes at a moment's notice.
Register Today!
EDITORS' PICKS
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...

Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...