California levies rate hike on harbour users as ports lose market share
CALIFORNIA ports are framing an annual tax hike system, which is opposed by shippers who say the industry is in decline and US west coast ports face external threats from Canadian, Mexican and US east coast ports, which can only be made worse by adding new costs.
"The proposal comes at a time when California ports are losing market share," said Pacific Merchant Shipping Association (PMSA) president John McLaren, in a letter to the California Association of Port Authorities (CAPA), which proposes the annual increases.
Said Mr McLaren: "The annual rate increase automatically increases rates without regard to the economy, the state of the industry, impact on competitiveness or financial standing, or needs of a port authority."
CAPA recommended the 11 ports in the state raise tariffs 1.7 per cent by July 1, and already there are hearings in the major container ports of Oakland, Los Angeles and Long Beach.
Among opponents is the Los Angeles Customs Brokers and Freight Forwarder Association (LACBFFA), which wrote to the Los Angeles Harbour Commission, saying: "California ports are continuing to lose market share to foreign ports. This annual automatic rate increase can foster the negative perception that California ports are adding fees and costs when other ports are not doing so. We believe that the port should be incentivising cargo to come to southern California by staying competitive in the market."
The letter continued: "We realise that the port will have to raise rates from time to time. We are concerned to see the Port of Los Angeles recommend a policy increasing rates annually, automatically without consideration of economic or market conditions."
CALIFORNIA ports are framing an annual tax hike system, which is opposed by shippers who say the industry is in decline and US west coast ports face external threats from Canadian, Mexican and US east coast ports, which can only be made worse by adding new costs.
"The proposal comes at a time when California ports are losing market share," said Pacific Merchant Shipping Association (PMSA) president John McLaren, in a letter to the California Association of Port Authorities (CAPA), which proposes the annual increases.
Said Mr McLaren: "The annual rate increase automatically increases rates without regard to the economy, the state of the industry, impact on competitiveness or financial standing, or needs of a port authority."
CAPA recommended the 11 ports in the state raise tariffs 1.7 per cent by July 1, and already there are hearings in the major container ports of Oakland, Los Angeles and Long Beach.
Among opponents is the Los Angeles Customs Brokers and Freight Forwarder Association (LACBFFA), which wrote to the Los Angeles Harbour Commission, saying: "California ports are continuing to lose market share to foreign ports. This annual automatic rate increase can foster the negative perception that California ports are adding fees and costs when other ports are not doing so. We believe that the port should be incentivising cargo to come to southern California by staying competitive in the market."
The letter continued: "We realise that the port will have to raise rates from time to time. We are concerned to see the Port of Los Angeles recommend a policy increasing rates annually, automatically without consideration of economic or market conditions."