California Apparel News

Los Angeles Mayor Antonio Villaraigosa said a group called the Competitive Cargo Strategy Group convinced the PierPass OffPeak program to postpone pickup fees at the ports of Los Angeles and Long Beach, Calif., while port officials and port companies examine the program to make it more efficient, perhaps avoiding a fee increase.

“We asked them for a timeout,” said Villaraigosa, speaking June 28 at a luncheon sponsored by the Pacific Merchant Shipping Association and held at Simon’s Waterfront Banquet Center, near the Port of Los Angeles.

The cost to collect a cargo container during prime-time daylight hours at the ports of Los Angeles and Long Beach was scheduled to increase on July 4 from $50 to $60 for a 20-foot container. For a 40-foot container, the cost was scheduled to rise from $100 to $120.

This was the first increase since 2006 in the so-called “traffic-mitigation fee.” The fee helps pay for the PierPass OffPeak program, which allows companies to collect their cargo containers at night before 3 a.m. without incurring an additional charge. A fee is required for most cargo movement between 3 a.m. and 6 p.m. on Mondays through Fridays.

The new charge was to offset a $52.3 million shortfall in PierPass’s 2010 revenues. The program was launched in 2005 to help move cargo through the ports faster and at a steady stream.

Geraldine Knatz, executive director of the Port of Los Angeles, said keeping cargo-container fees down is one way of keeping the local ports competitive. She said officials at the Port of Los Angeles and the Port of Long Beach are examining ways to move cargo through the ports more smoothly by perhaps scheduling appointments for cargo pickups. Now, truck drivers participating in the PierPass Offpeak program, which starts at 6 p.m., often are showing up at 2 p.m. to be first in line. Her message to PierPass was this: “Let us work with you to optimize the system.”

Villaraigosa, noting that the Port of Los Angeles is one of the economic drivers for Los Angeles’ economy, said that as the newly elected president of the U.S. Conference of Mayors, he plans to form a Ports Committee of Mayors at the group’s next meeting in Los Angeles in July.

“We’ll start to advocate for the free-trade agreements, particularly with Korea,” he said, referring to the pending trade accords with South Korea, Panama and Colombia. South Korea is a major trading partner with Los Angeles.

The Port of Los Angeles generates a lot of revenue for the city of Los Angeles, which owns the port, but the port’s cargo volumes decreased 18 percent during the economic downturn, the mayor said.

“But we’ve had a strong 2010 with volumes up over 16 percent, and that increase was sustained for 16 months of growth,” he noted. “But nobody says we are out of the woods, and we have many challenges ahead of us.”

One of the biggest challenges is the widening of the Panama Canal, which should be completed by 2014. That project will allow for bigger container ships to pass through the canal’s locks, making direct transportation of cargo from Asia to the East Coast faster and cheaper. It also means there could be less cargo traffic to West Coast ports that currently unload many of the cargo containers headed east via trains or trucks.—Deborah Belgum