Marine Terminal Operators at the Ports of Los Angeles and Long Beach announced that they will raise the current Traffic Mitigation Fee (TMF) to $60 per TEU in order to sustain continued operation of PierPass OffPeak gates. The TMF adjustment is effective July 4, 2011.
The Operators claim that hourly labor costs have increased 31 percent since the last price setting in 2006. The terminals have operated the OffPeak gates at a loss since the program's start in 2005. The shortfall between TMF revenues and OffPeak gate costs was $52.3 million in 2010.
"It is clear that absent some action, TMF revenue will continue to fall short of OffPeak gate costs and endanger the program," said Bruce Wargo, president of PierPass, the non-profit formed by the West Coast MTO Agreement in 2005 that runs the OffPeak program. "With 55 percent of non-exempt cargo movements taking place during OffPeak hours, the program has become an important element of port operations."
A number of options were evaluated by marine terminal operators to cut the losses, including adjusting the rate, decreasing the services offered, or instituting a fee on OffPeak cargo. Adjusting the rate was determined by the marine terminal operators to be the most effective and least disruptive way to reduce the losses.
Beginning in mid-2012, the TMF will be adjusted annually based on changes in Pacific Maritime Association maritime labor costs.
OffPeak provides an incentive for cargo owners to move cargo at night and on weekends, in order to reduce truck traffic and pollution during peak daytime traffic hours and to alleviate port congestion.