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California legislators vote to OK a $30 fee on containers moving through state’s ports

LOS ANGELES – 07/16/08 – Shippers with cargo moving through West Coast ports, particularly those with containers moving through the mega-load centers of Los Angeles and Long Beach, are increasingly concerned over ongoing developments that could increase not only the rates they pay to have their goods shipped, but how quickly their cargo moves through the ports’ already overburdened terminal infrastructure.

According to the Pacific Maritime Association (PMA), over the past several days, longshoremen at the nation's largest port complex have continued to take shift breaks at the same time and working at a slower pace, causing serious delays in moving containerized cargo in and out of the nation’s two busiest container ports.

The dock workers have been taking coordinated breaks every day since last Friday and “have taken other small job actions” including repositioning containers within the ports’ terminals “moving more slowly than normal" and “brief delays during the transferring of containers onto trucks or back on ships,” said PMA spokesman Steve Getzug.

"What we're talking about here is fewer containers being moved hour to hour, which has a cumulative impact," Getzug said. "The kinds of actions we're seeing are of concern to us because it has obviously an impact on operations, but it also signals that the union is going back to tactics that they used in the past to influence negotiations when a contract runs out."

International Longshore & Warehouse Union (ILWU) spokesman Craig Merrilees said the shippers were "exaggerating" and that both sides were still talking.

"What's really important is that the ports are open, cargo is moving, longshore workers are on the job, companies are making tons of money, and the contract talks are making progress - that's a pretty good situation from any perspective," he said.

The San Francisco-based Pacific Maritime Association represents the management of the ocean carriers and terminals at the 29 ports along the U.S. West Coast, while the ILWU represents more than 26,000 longshoremen at 29 deep-water ports in California, Oregon, and Washington.

The PMA and the International Longshore and Warehouse Union (ILWU) have been in negotiations for a new, three-year contract since last March. The ILWU has been working without a contract since July 1, making it virtually impossible for shippers to contest what they believe to be disruptive tactics.

The twin ports of Los Angeles and Long Beach handle about 40% of the nation's import cargo and are ranked the busiest and second-busiest container ports in the US.

The union and the shippers are seeking to avoid a repeat of a bitter labor dispute that led to a 10-day lockout in 2002, which almost brought the US economy to a standstill and caused an estimated $15 billion in economic losses.

Both sides have already reached a tentative agreement on health care benefits. Wage, pension, safety and productivity issues remain under discussion.

In a related development, California State Senator Alan Lowenthal’s proposal to impose a fee on most cargo containers entering California ports has passed in the California State Assembly by a 45-23 vote.

The bill – The Ports Investment Bill, SB 974 – levies a tariff of at least $30 on ocean containers moving through the ports of Long Beach, Los Angeles and Oakland. With 16 million containers expected to be affected, that would generate $480 million in revenue.

The collected fees, said Lowenthal’s office, will be put towards cleaning up air quality along California’s coast, mainly by “implementing cleaner trucks and exploring alternative shipping methods.”

The Senate bill, favored by Democrats and opposed by most Republicans, will move on to the State Senate for concurrence before coming before Governor Arnold Schwarzenegger.

Assembly Democrats cited the "high pollution" caused by ships, trains and trucks at the ports, while Republicans shared fears that escalating costs will drive business away from the state’s ports and compel shippers to move their cargo through other ports, particularly those on the US Gulf and East Coasts.

Lowenthal originally introduced the bill in 2005 and while it received strong support, ultimately died on the Senate floor.

More than one dozen changes were made to produce the current version of the bill, as the original version of the legislation didn’t include container cargo moving through the Port of Oakland.

The bill, said Steven Ly, vice president for public policy with the Long Beach Chamber of Commerce, is unnecessary because the ports of Long Beach and Los Angeles are continuing to implement intensive programs to mitigate the pollution created by cargo handling activities at both ports.

"It's not just bad for business," Ly said. "It's redundant. We've heard the governor has indicated he's willing to sign the bill, which worries us deeply."

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