Four weeks ago we wrote about a number of current proposals for new programs and supporting fees at the LA/Long Beach port complex which, if approved, would greatly exceed what studies have shown to be the “tipping point”. Something’s gotta give, we opined, in order for these new fees [fines] to be imposed, and sure enough certain politicians began nosing around.
“A Los Angeles Harbor Commissioner,” we wrote, “has assigned the commission port staff the task of determining whether the PierPass OffPeak program is still necessary. Although initial reports attested to the success of the program, the organization has not issued program updates in almost a year, and the failure to do so has caught the attention of the above-mentioned commissioner as well as others. The pros and cons of the program have been discussed ad nauseam, but the underlying reason for the commissioner’s concern is not whether or not the PierPass program is of any value, his real concern is that the $ 50 per TEU PierPass add-on is now an obstacle to the funding of those programs which address the health and well-being of residents in port communities.”
Hold it a minute. Weren’t we sold the bill of goods that the PierPass program was set up to “address the health and well-being of residents in port communities”? The Port of Los Angeles Harbor commissioners are finally showing concern about overcharging by the $ 125 million-a-year initiative. On May 15th the president of the PierPass OffPeak program was called on the carpet by the commissioners to report on the financial status of the program, and while he did not provide specifics, he said that labor represented 89 percent of the $ 125 million annual take.
“We need to see some numbers to justify the $ 50 or else we need to consult with our attorneys and find out what authority we do have,” warned Commission president David Freeman. “We cannot sit here without some justification for a $ 50 container fee being maintained in the future,” he said.
“What we don’t understand,” pressed Commissioner Douglas Krause, “is PierPass covering costs or is it part of making profits” for the terminals?
“If they’re making millions of dollars on it that’s not what was sold and that’s not right,” said the California manager for Total Logistics Resources.
When the commissioners also wanted to know why they, as well as the neighboring Port of Long Beach, have not been provided full financial accounts of the program, the PierPass president replied that he would need the approval of the participating terminal operators in order to release financial data.
Hold it another minute … while we rephrase the question we asked above. If we were assured that the PierPass fees were supposed to “address the health and well-being of residents in port communities”, why is the financial information [and the finances?] controlled by terminal operators?
[From the outset we felt that the initiative itself was polluted.]