Long Beach / Los Angeles to implement yet another container fee

Last month we talked in detail about the port of Long Beach voting to impose a $35 per TEU fee on local drayage moves, despite strong opposition from trade groups. Looks like they aren’t through yet as both Los Angeles and Long Beach want to implement yet another container fee, this time on loaded cargo containers, that is supposed to help pay for infrastructure improvements:

The $15 per container fee goes into effect Jan. 1, 2009, jumps to $18 in 2010, then decreases to an unspecified amount two years later. It will remain in effect until the projects are fully funded, which officials expect will be seven years, but could be longer.

Funds raised by the fees are expected to cover about half the cost of building the slate of infrastructure projects, with the remaining money coming from federal and state sources.

There’s no question that the ports require significant and continued investments in infrastructure and that the money has to come from somewhere. But increasing fees and regulatory burdens at Los Angeles and Long Beach are driving up costs and will reduce Long Beach / Los Angeles competitiveness. I’m sure port commissioners are counting on continuing growth much like that quoted in the article:

Exploding economic growth in Asia is expected to triple the cargo container volume at the ports of Los Angeles and Long Beach over the next two decades.

Maybe I’m just prone to being contrary, but while container volumes worldwide will continue to grow as world trade grows, I’m not so sure anymore that Los Angeles / Long Beach will continue to be the main gateway to the U.S. for trans-Pacific trade. Certainly in the foreseeable future, but with port expansion in both Canada and Mexico, increasing demand for All-Water services to the East Coast, and shipper and trade groups wary of LA/Long Beach port congestion and rising costs, the ports could start to see their share of containerized cargo diminishing.