Pacific Coast port assessments could soar
Rising retirement and benefit costs for dockworkers could soar in the next fiscal year because of the sharp drop in container freight volumes, the Pacific Maritime Association said.
Even if cargo volumes were flat, man-hour and TEU rates were slated to increase by 20 percent to cover rising pension, medical and other benefit costs, said the PMA, which represents shipping lines and terminal operator employers.
But with a projected 15 percent decline in container volumes for fiscal year 2009 compared to fiscal year 2008, and a similar decline in man-hours for dockworkers, costs are likely to explode.
In a bulletin issued last month, the PMA said assessment rates could climb 66 percent to $35.73 per man-hour and 69 percent to $37.78 per TEU.
PMA warned the industry that “increases of this magnitude would have a negative impact on the competitiveness of the West Coast operations and could create additional issues for their future viability.
“To this end, the board is looking at several options to mitigate these increases. However, even with these options, unless there is a dramatic recovery in volume, which is not currently anticipated, we expect assessment rates will approach or exceed plus-or-minus $30 per man-hour and in excess of that for the TEU rate. If volumes further deteriorate beyond current projections, then these rates could further increase.”
The bulletin can be read here.