On Aug. 1, the price terminals at the Southern California ports of Los Angeles and Long Beach charge for moving cargo during daytime hours Monday through Friday will increase 2.3 percent to $72.09 per TEU, or $144.18 per FEU.
The fee that terminals at the ports of Los Angeles and Long Beach charge for moving cargo during daytime hours Monday through Friday is about to go up.
On Aug. 1, the Traffic Mitigation Fee (TMF) at the adjoining Southern California ports is increasing by 2.3 percent, according to the West Coast MTO Agreement, which announced the news late last week. Starting next month, the fee will rise to $72.09 per TEU, or $144.18 per FEU.
The WCMTOA, which consists of the operators of the ports’ 13 marine terminals, periodically adjusts the TMF based on changes in maritime labor costs. The TMF was last adjusted in August 2016, when it rose 1.9 percent, going from $69.17 per TEU to $70.49 per TEU and $140.98 per FEU.
The latest adjustment matches the combined 2.3 percent increase in longshore wage and assessment rates that took effect July 1, according to the West Coast MTO Agreement.
The mitigation fee is charged on containers that are moved between 3 a.m. and 6 p.m. on weekdays. No fee is charged on containers moved during off-peak shifts of 6 p.m. to 3 a.m. on weekdays or 8 a.m. to 5 p.m. on Saturdays, thereby giving movers of cargo an incentive to import and export goods through the ports during off-peak hours.
Using a congestion pricing model, the PierPass administration program charges a traffic mitigation fee on weekday daytime cargo moves to incentivize cargo owners to use the off-hours shifts. The TMF also helps offset the cost of operating extended gate hours. Labor costs, the West Coast MTO Agreement has said, are the largest single component of extended gate costs.
An analysis by maritime industry consultants SC Analytics has shown that the net costs incurred by the terminals to operate the OffPeak shifts in 2016 totaled $224.7 million. During that year, the terminals received $182.7 million from the Traffic Mitigation Fee, offsetting about 81 percent of the off-peak program’s costs.
PierPass launched the off-peak hours program at the ports in 2005 to reduce severe cargo-related congestion and air pollution on local streets and highways around the Los Angeles and Long Beach ports. Nearly half of all port truck trips now take place during off-hours shifts, according to data.