Taxed Messages

Last week we wound up Art. 7 by recalling that “a study at U.C. Berkeley in 2006 showed that fees above $ 100 per TEU could cause about 1 million TEUs to divert from LA/Long Beach ports to other West Coast ports”.

Those folks at U.C. Berkeley were right on the money. In an American Shipper report we read that: “The arrival of the first container ship from COSCO on Oct. 31, 2007 at the recently completed Prince Rupert Container Terminal marked the opening of a new Asia-North America express trade corridor and heralded a new era for the Port of Prince Rupert. COSCO’s weekly service moved 16,703 TEUs through the facility for the two months of operation in 2007 … ‘Our focus now is to achieve full utilization of the 500,000 TEU facility and complete the groundwork to begin construction of Phase 2 of the Prince Rupert Container Terminal by early 2009,’” the chairman of the port’s Board of Directors was quoted as saying.

But that’s just the beginning. Here’s what Kristopher Hanson just reported in his January 22nd article in the Long Beach Press-Telegram:

“LONG BEACH – Weeks after approving two container fees to subsidize local environmental programs and infrastructure projects, Long Beach harbor Commissioners endorsed a third such fee to fund rail and air quality projects across the state …

“Coupled with the fees recently approved by the ports of Long Beach and Los Angeles, Lowenthal’s bill could add up to $ 160 to the cost of moving most 40-foot-equivalent containers (FEUs) through local seaports …

“The new fee tacks $ 60 to each 40-foot-equivalent container moved through the ports of Long Beach, Los Angeles and Oakland. Those costs would be on top of a $ 70-per-FEU tax the ports of Long Beach and Los Angeles jointly approved in December to pay for truck replacement, and a $ 30-per-FEU tax the same boards approved for infrastructure projects earlier this month.”

First we heard about the PierPass incremental container fees that now stand at $ 100-per-FEU. Then Fran Inman wisely cautioned port and harbor officials about a “tipping point”. The commissioners have turned a deaf ear, however, and insist that these new fees make sense. They still believe that Postpanamax vessels will continue to deliver enormous loads to U.S. consumers … in spite of the fact that the chairman of the Federal Reserve has all but guaranteed a recession.

“California has already hit the wall,” said Pat Buchanan earlier this week. “With an economy as large as a G-8 nation, the Golden State is looking at a $ 14 billion deficit in 2009 and a $ 3 billion shortfall in 2008 … The Democratic legislature is demanding tax hikes, which would drive more taxpayers back over the mountains whence their fathers came.”

[With vessels being diverted, along with taxpayers, who needs the proposed infrastructure projects?]