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            january 20, 2019

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US retailers call for delay in LA-LB PierPass flat fee


US retail importers have turned down a proposed flat fee for all loaded container moves during both day and night operating hours at the Los Angeles-Long Beach port complex, arguing that it will seriously impact competition.
The proposed revision from a congestion-based model charged only on daytime container moves is "anti-competitive and market distorting," the National Retail Federation (NRF) stated in a letter to the Federal Maritime Commission (FMC), reported IHS Media.
PierPass president John Cushing responded that the new fee structure was agreed upon by a majority of beneficial cargo owners (BCOs), truckers, intermediaries and other port stakeholders with whom terminal operators in southern California met during an outreach programme the past two years.
Mr Cushing agreed with the NRF that some BCOs will pay more under the new model, and others will pay less but the proposed flat-fee pricing strategy was judged to be better than other options, such as dynamic, variable-rate pricing and a port-wide container peel-off proposal.
The NRF asked the FMC to turn down the new fee structure with the mandatory appointment system, or at least delay a decision to gather more information on how the appointments will work and to ensure the pricing mechanism and use of the funds to reimburse terminal operators for the added costs associated with extended gates are made more transparent.
Large retailers who have been moving much of their freight at night in order to avoid paying the traffic mitigation fee will most likely end up paying more under the revised fee structure.
Smaller BCOs who have been paying the traffic mitigation fee because they move most of their freight during the day will pay significantly less because the flat fee will represent a 55 per cent reduction from the current congestion-based fee structure.
Some BCOs instruct their truckers not to complete the container delivery until 6pm. Those truckers either wait outside the terminals for an hour or longer, causing congestion outside the gates, or they enter the terminals before 5pm and wait inside the facilities until 6pm when the fee is waived, thereby contributing congestion inside the terminals.
If it is approved, the new programme, known as PierPass 2.0, is expected to begin in August.

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