Ports Ax Fee but Truckers Won’t Give Break on Cost

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The ports of Los Angeles and Long Beach have stopped charging a fee that allowed older trucks to haul cargo, but trucking companies said their customers shouldn’t expect to start paying less.

The ports’ Clean Truck Fee charged $70 for every 40-foot shipping container hauled to or from the ports using a truck that didn’t meet 2007 federal environmental standards. Effective this year, the ports banned all trucks that don’t meet those standards, so without older trucks, the fee was eliminated.

When the fee was in place, trucking companies were able to raise rates for cargo hauled by newer trucks because the older trucks with the fee were still pricier. Now, retailers and other customers are demanding trucking companies lower their fees, but the companies said they can’t do so because they are still paying high lease rates on their new trucks.

The old trucks that used to be common at the port might cost as little as $5,000 or $10,000, while the new trucks can cost upwards of $100,000.

“You need to have $100 per day in (extra) revenue to pay for the new truck. I don’t think any trucking company can afford to not charge something (extra),” said Fred Johring, president of the Harbor Trucking Association trade group and trucking firm Golden State Express in Rancho Dominguez.

The trucking association is trying to spread that message, issuing a statement just before the new year that made a clear distinction between the port fees and trucking companies’ “surcharges,” which are tacked on to regular fees to pay the truck leases. The surcharges can vary by company.

The statement even quoted new Port of Long Beach Executive Director J. Christopher Lytle encouraging cargo owners to recognize that “trucking companies who did the right thing by investing in clean trucks still have a significant financial commitment to honor.”

Anchors Away?

Drug violence in Mexico continues to cause collateral damage to the L.A. economy.

The Port of Los Angeles, which has seen its cruise ship traffic cut in half over the past several years, took another hit last week when Disney Cruise Line, the port’s second biggest cruise customer, announced it cancelled four Mexican cruises scheduled for December.

Officials from the Lake Buena Vista, Fla., cruise line declined to detail the reasons for the cancellations, but Chris Chase, the port’s business development manager, said Mexican violence is to blame.

“Mexico is really unstable right now. That’s been affecting us since two and a half, three years ago,” Chase said. “The cruise industry is quite healthy, but our market has been hit by two major factors – Mexico and the recession – while most markets have been hit by just one.”

Mexico is the biggest cruise destination for ships out of Los Angeles.

The port’s cruise traffic hit its peak in 2005, with more than 250 ships and 1.2 million passengers. That was down to an estimated 144 ship calls and 605,000 passengers last year. After the Disney cancellations, the port has just 99 calls on this year’s calendar.

Cruises represent a tiny portion of the port’s business – about 2.5 percent of revenue – but passengers frequent local shops, restaurants and hotels. In fact, the port generously estimates that the economic activity amounts to some $1 million per call.

In 2009, the port struck a deal with Disney that brought the company’s Disney Wonder ship to Los Angeles last year and this year. Disney guaranteed at least 52,000 passengers during each of those years in exchange for improvements to the port’s cruise terminal.

Chase said Disney will meet the passenger guarantee even with the cancellations.

The deal also included options to extend Disney’s stay in San Pedro through 2015. Chase said it’s not clear if the cruise line will exercise its option to return.

More Upgrades

The Port of Los Angeles last month released a draft environmental report for what could be the last major port renovation project for the next few years.

The report outlines proposed upgrades to Pier 300 on Terminal Island, home to shipping company APL Ltd., part of Singapore-based shipper Neptune Orient Lines Ltd. The $220 million in upgrades include extending the wharf to accommodate larger ships, adding cargo storage space and doubling the number of cranes. The improvement would increase the terminal’s annual capacity from 2.2 million to 3.2 million cargo containers.

The port will take public comments on the draft environmental impact report for Pier 300 through Feb. 17.

Staff reporter James Rufus Koren can be reached at [email protected] or at (323) 549-5225, ext. 225.

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