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HOT TOPICS -- Marine Terminals in So Cal Launch PierPass
Indeed, PierPass was formed by marine terminal operators, with the support of organizations including the Waterfront Coalition, as an alternative to government taxation. The marine terminal operators and the shipper members of the Waterfront Coalition both believed that finding a private way to open and fund off-hour gates would be far superior (and cheaper in the long run) than a new tax. When PierPass was announced in August, 2004, Mr. Lowenthal dropped his bill.
How big will the
fee be? (Updated May 24, 2005)
According to an annoucement made by PierPass in late May, the initial TMF
will be $40/FEU. This fee will last for the FIRST WEEK OF THE PROGRAM (slated
for end of July 2005 -- see below). Thereafter the TMF will double to $80/FEU.
PierPass will be subject to audits, however, and will publish periodic reports
so that shippers can see where the money is going and make certain that
the fee is being used to offset the real costs of providing off-hour gates.
Also, the organization has an advisory committee with seats for cargo
owners, so that transparency in the fee will be more likely to be achieved.
The Waterfront Coalition has been has been granted a seat on this advisory
committee.
When will it start?
(Updated July 28, 2005)
After a few
minor computer glitches, PierPass is ready to be rolled out on Friday, July
29th beginning at 3 am. Click here to read PierPass' cmmunication to industry.
Who pays the fee?
(Updated June 1, 2005)
The short answer is that Beneficial Cargo Owners (BCOs) are responsible
for paying the fee on laden containers that are dropped off or picked up
by truck during "peak hours." Intermodal cargo loaded "on-dock",
and cargo that either moves via the Alameda Corridor or on which an Alameda
Corridor fee is charged is EXEMPT from the TMF.
The entity listed as a shipper/consignee in an ocean bill of lading will be considered the BCO responsible for paying the PierPass traffic mitigation fee. This includes NVOCCs.
MORE IMPORTANT -- Recent announcements by PierPass have confirmed that CARGO THAT IS PICKED UP DURING OFF HOURS WILL NOT BE CHARGED ANY FEE AT ALL. ONLY CARGO MOVED BY TRUCK DURING PEAK HOURS WILL BE ASSESSED THE TMF. THIS IS A MAJOR CHANGE IN THE STRUCTURE OF THE PROGRAM.
How
Will the Fee Be Collected? (Updated
May 24, 2005)
In sum, PierPass will
be encouraging all BCOs to develop some kind of credit relationship with
them so that fees can be collected periodically after the fact. They
will be offering several different kinds of options from credit card options
to full EDI. All BCOs who will be moving cargo during peak hours will
have to register with PierPass. If you do not register, you will not be
able to move cargo. For information on BCO registration requirements click
here.
Registration for BCOs has been available since May 18, 2005.
How to Establish
a Credit Relationship? (Updated
May 24, 2005)
BCOs will be able to
establish different accounts to pay the TMF. For example, PierPass will
allow credit card payment, direct credit account and EDI payment. PierPass
is still examining business rules for each payment option. Non-credit accounts
will be required to make payment by credit card, debot card or e-check.
The point-of-contact on all credit accounts will recieve a weekly e-mail
with invoice and other documentation. Before a BCO can establish a credit
relationship it must register with PierPass. During the registration process,
those BCOs wishing to establish a credit agreement will be able to choose
this payment option. PierPass will contact the account administrator for
your company to payment options about 10 days after you register. Those
BCOs wishing to pay the TMF by credit card can set that up during the registration
process. To register for PierPass, click here.
PierPass is encouraging non-BCOs, including truckers and brokers, to register with PierPass, although the Waterfront Coalition wishes to point out that only BCOs are responsible for paying the fee. Truckers or Brokers who do not wish to take on this responsibility are not required to do so. The TMF is being imposed on BCOs for the express purpose of attempt to influence business practicies--by making it more expensive to move freight during congested daytime hours.
How many off-hour
shifts will there be? (Updated
May 24, 2005)
PierPass Gates will be open Mondays through Thursdays (6 pm to 3 am) and
Saturdays (8 am to 6 pm).
Can I get credit
for containers moved during an "unofficial" off-hour gate?
Several terminals in the LA/LB port complex are already provided off-hour
gates of some kind. If the terminal is offering an off-hour shift that is
considered "non-peak" hours, shippers will be exempted from the
traffic mitigation fee. However, shippers should take care -- the definition
of off-peak does NOT include so-called "hoot gates" -- gates offered
in the early mornings, since these gates increase traffic during morning
rush hours. It is unlikely that off-hour gates that do not comport with
the PierPass schedule will continue to be offered.
Why can't I have
my carrier pay this fee?
Many shippers have contacted us about the administrative difficulties of
establishing a new business relationship with PierPass. Intermodal rail
users, in particular, would like to have their ocean carriers take care
of this fee. However, federal maritime law specifically precludes carriers
from paying this fee. The fee is assessed on the importer/exporter, and
can be paid and managed by a third-party logistics provider or broker. However,
the responsible part for the fee is the BCO.
Is there any way
to influence this?
(Updated February 1, 2005)
Yes. PierPass is in the process of forming an Advisory Committee composed
of shippers and governmental agencies and entities. We understand that the
board will initially have nine seats, and the Waterfront Coalition has been
provided a seat on the board. In the future the size of this board will
increase, and more shippers will have an opportunity to sit on it. We expect
that this board will have quite a bit of influence over how PierPass evolves
in the future. Shippers clearly will have a voice in ensuring that PeirPass
fees are used specifically for the purpose they were intended--namely to
pay for extended hour gates port-wide and not to enrich terminal operators.
We expect the Advisory Committee will also play an important role in ensuring
that PierPass and the ports themselves continue to measure the effectiveness
of this program in reducing road congestion during peak commute times.
Will this fee be
collected forever? (Updated May 10, 2005)
No. PierPass has said
many times that it intends to sunset the fee after two or three years. MTOs
have stated in the past that they plan to sunset the program when 40% of
truck-borne commerce moves through all 13 terminals during the night shift.
MTOs expect to reach this goal in two to three years after the July 2005
implementation date.
Clearly, if we get to a point where more people are using off-hour gates than daytime gates we can force the elimination of this fee over a faster time frame. Terminal operators are concerned that their costs will skyrocket if we simply end up moving the same number of containers during more hours. Certainly trade growth will help make off-hour gates more popular. But shifting our business practices will do it, too. If terminal operators realized that they can save costs on the day side, they will do it, reducing costs for everyone.
More information:
What is PierPass?
PierPass, Inc. is a "special
purpose entity" created by the marine terminal operators in the ports
of Los Angeles and Long Beach. The purpose of this entity is to collect
a "traffic mitigation fee" (TMF) that will be used to pay for
the costs of coordinated and regularly scheduled extended hour truck gates
throughout the the LA/LB port complex. PierPass is a non-profit organization
that will collect the fee and disburse it to the marine terminal operators
within the port. Any importer or exporter who uses an extended hour gate
will have its traffic mitigation fee refunded.
Why is this happening?
Port related truck traffic has been a contentious issue for some time.
In 2001, the Waterfront Coalition, representing the entities that own the
cargo, began to urge Southern California terminal operators to extend truck
terminal gate hours, through a pilot program.That effort--interrupted by
the port lockout in 2002--made strides in educating the largest shipers
about the importance of change, but it did not succeed in opening many off-hour
gates.
Stay on top of breaking PierPass information, tailored specifically for shippers. It's free, and you don't have to be a Waterfront Coalition Member.
Click here to sign up.
Have a question or comment?Contact us, and we'll try to get you an answer.
