West Coast MTO Agreement Increase Rates to Support PierPASS Operations

West Coast MTO Agreement Increase Rates to Support PierPASS Operations

On August 1, 2015, the West Coast MTO Agreement (WCMTOA) to increase the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach took effect. This 4 percent fee increase reflects the rise in labor costs contained in the contract recently agreed to between the Pacific Maritime Association and the International Longshore and Warehouse Union (ILWU). To sustain continued operation of PierPass OffPeak gates amid labor cost issues, the TMF went from $66.50 per TEU (twenty-foot equivalent unit) to $69.17 per TEU or $138.34 per forty-foot container.

The WCMTOA came under scrutiny on July 20 from the Federal Maritime Commission Chairman Mario Cordero as he called for more transparency in PierPASS operations. “To avoid dissatisfaction from customers due to increased fees, PierPASS must be more transparent about the cost to operate off-peak shifts and the revenue collected from the TMF. I am a strong advocate for openness in the supply chain in order to promote a fair and efficient system, and believe it is time for PierPASS to critically self-assess its performance along five key dimensions: sun setting, service levels, fairness, transparency, and performance metrics,” said Chairman Cordero.

Click here for the key five dimensions…

The Traffic Mitigation Fee helps pay for the night and Saturday marine terminal shifts created by the PierPass OffPeak program to relieve daytime congestion in and around the ports. It also provides a financial incentive to move cargo during less-congested times. The TMF is charged for non-exempt containers moving during peak hours (Monday through Friday, 3 P.M. to 6 P.M.). WCMTOA periodically adjusts the TMF based on changes in maritime labor costs and the last adjustment was in August 2013. In 2005, when the program was first implemented, the TMF was significantly lower at $40 per TEU. “In light of this fee increase, I believe that PierPASS and the thirteen terminals at the Ports of Los Angeles and Long Beach should justify the continued need for the TMF, as well as the sustainability of annual TMF increases,” Cordero added.

PierPass is a not-for-profit company created by marine terminal operators at the Port of Los Angeles and Port of Long Beach to address multi-terminal issues such as congestion, air quality and security. The West Coast Marine Terminal Operator Agreement (WCMTOA) is filed with the Federal Maritime Commission, and comprises the 13 international MTOs serving the Los Angeles and Long Beach ports.

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