Today, the West Coast MTO Agreement (WCMTOA) announced it will raise the current Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach to $60 per TEU (twenty-foot equivalent unit) in order to sustain continued operation of PierPASS OffPeak gates.
This is the first increase in the TMF since 2006. Since then, labor costs have increased 31 percent. The terminals have operated the OffPeak shifts 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.
With fifty-five percent of 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 TMF, 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.
The rollout of the TMF adjustment is effective July 4, 2011. Read the press release for more details.