Long Beach port set to implement $35 container tax
Port of Long Beach harbor commissioners on Monday are expected to approve new rules hitting cargo owners with a port-wide $35 container tax.
The tax is expected to raise $1.6 billion over five years to pay for a controversial truck re-regulation program being implemented in stages by the port board and their counterparts at the neighboring Los Angeles port.
The $35-per-TEU tax, scheduled to last through 2012, would be applied to all loaded import and export containers drayed by truck into or out of Long Beach port terminals. Containers being moved by on-dock rail are exempted from the tax. To cover the entire port complex, commissioners at the Los Angeles port are expected to pass an identical tax on Dec. 20 covering Los Angeles terminals.
Set to take effect June 1, 2008, the tax would be assessed to the beneficial cargo owner, or end user. It will cover about 60 percent of the TEUs that move through the two ports each year.
Under the proposed rules regarding the tax, the ports would make Long Beach terminal operators responsible for collecting the TEU tax from the cargo owners. The terminal operators would then turn the funds over to the ports, where they will be held in a port-controlled fund. The port will draw on the fund to pay for the replacement and retrofit of the nearly 17,000 trucks in the ports' drayage fleet.
The two ports' $1.8 billion truck plan over the next five years, will ban most of the current trucks in the ports' drayage fleet from working at the ports. Drivers wishing to remain working in the ports must replace or retrofit their trucks to meet the emission standards for 2007 models.
A truck-licensing component of the plan, which will see the ports' issue licenses to truck owners who meet certain port-defined criteria, is yet to be voted on by the ports. The ports' original plan, introduced in April, called for an employee-only criteria to obtain a license. The employee-only provision would force trucking firms to hire drivers as per hour workers instead of as independent contractors on a per-load basis. The vast majority of port drayage drivers are independent owner-operators and surveys have shown that most do not wish to be employees.
The truck plan, especially the employee-only component, has drawn criticism from the transportation industry while eliciting support from the International Brotherhood of Teamsters. The Teamsters, in numerous public statements, have said they support the plan and employee-only model in the hope it will lead to the unionization of port drayage drivers.
Ironically, though port officials claim the truck plan is being imposed in part to uplift area drayage drivers, the new tax would eliminate or dramatically reduce the roughly $50 to $150 now earned by the drivers per load.
Additionally, even those truck owners who replace their trucks with newer models — which can cost more than $140,000 — will still face the $35 per TEU tax.
While the Long Beach port board is expected to implement the $35 per TEU tax on Monday, the truck plan licensing component, details of how the collected container tax funds would be spent, and the implementation of an additional container tax to pay for other port programs will be considered in January or February. ' Keith Higginbotham
Long Beach port set to implement $35 container tax
