West Coast ports applaud inquiry on Canada cargo

  The six primary container ports on the U.S. West Coast thanked the Federal Maritime Commission for opening an investigation into why an increasing amount of cargo is being routed through the Canadian ports of Prince Rupert and Vancouver.
   In a letter last Friday, the ports singled out U.S. regulations – namely the Harbor Maintenance Tax and shippers desire to avoid it – as the primary suspect behind the diversion rather than inappropriate infrastructure-development subsidies by the Canadian government.
   “Through our own policy, we’ve tilted the playing field against ourselves,” Port of Seattle Chief Executive Tay Yoshitani said in a separate statement. “By leveling that field, we can protect the nearly 300,000 jobs generated by ports on the West Coast and the revenues that our communities need for economic recovery.”
  The HMT averages about $80 per container, but often can add as much as $200 to the transportation cost based on the value of the goods enclosed. It is levied on imports to help pay for harbor and channel maintenance.  
   The FMC is looking into the cross-border port shopping at the request of lawmakers from Washington and California. The study will consider the impact of the HMT, other policies and factors that may create an incentive for shippers to switch to Canadian or Mexican ports of entry. The members of Congress asked the Commission to make legislative and regulatory suggestions to address the situation. The agency is accepting comments from interested parties through Dec. 22.
   The West Coast ports – Seattle, Tacoma, Oakland, Los Angeles, Long Beach and Portland – complained in their letter that Canadian ports, railroads, and other transportation providers promote the loophole in U.S. tax policy to demonstrate a cost advantage over using U.S. ports “and actively market this advantage to our own customers.” 
   “Ultimately, we seek to reestablish a level playing field in the policy arena so U.S. ports can compete based on our ability to effectively serve shippers, exporters, consumers and our own communities. It is critical we get this right,” the letter said. 
   Should the FMC determine that cargo is being diverted to Canada policymakers will have to determine whether to equalize the treatment by either adding a border tax on imports coming through the land border with Canada or scrapping the Harbor Maintenance Tax itself. – Eric Kulisch