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
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...