The Breakdown

Explaining Southern California's economy

Port of Long Beach offers incentives to shippers

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In the business of seaports, competition for ships to dock and move cargo is tough.  In California, new environmental rules make it even tougher.  So the Port of Long Beach will soon offer shipping companies two new incentives -- both of which aim to boost business while reducing air pollution.  

One incentive will waive “dockage” fees for cargo ships that slow down within 40 nautical miles of the Port -- and then plug into on-shore power or use a technology that cuts emissions while docked.

"It’s free parking," says Rich Dines, Vice President of the  Board of Harbor Commissioners for the Port of Long Beach.  Those parking spaces have value. 

"This will average from $4,000 to $8,000 dollars a day for a large container vessel," Dines says. That's money the shipping company gets to keep.  

Port of Long Beach officials estimate a loss of $3.3 million to $4.9 million a year due to the dockage waiver program, but the measure is expected to attract additional cargo to Long Beach, and help to offset the costs with an increase in revenue from other fees.

The other incentive encourages shippers to load their cargo directly onto trains on the dock in order to reduce truck traffic.  The "Incremental On-Dock Intermodal Incentive Program" will pay shippers $5 per loaded 20-foot-equivalent container unit for new cargo above the 2013 baseline level that is also rail-hauled either out of, or into, the Port said. 

"Our community has demanded that we increase the amount of 'on-dock' rail," Dines told KPCC, adding that two years ago, 19% of the cargo volume at the Port of Long Beach moved via on-dock rail, and now it's 22%.  "You have fewer trucks driving around the ports to a near-dock rail facility, less congestion, and you increase productivity."

The Port of Los Angeles has also offered incentives to increase cargo volumes.   Tom O’Brien, interim director of the Center for International Trade and Transportation at Cal-State Long Beach says the incentives are just as much about perception as they are about actual cost reduction for the shipping companies.   

"I don't think these are going to be a big money-maker for the ports, but part of the battle is changing the perception in other parts of the world and with the industry that the ports of LA and Long Beach are not business friendly because of environmental measures," O'Brien said. 

That perception has to change, he adds, because Los Angeles and Long Beach aren't just competing with each other for cargo.   In a statement announcing the incentives, Long Beach Board of Harbor Commissioners President Doug Drummond referenced seaports north in Canada and Mexico.

“We are really in competition with Vancouver, with Prince Rupert, with Lazaro Cardenas, where costs are much lower than San Pedro Bay,” Drummond said. 

 

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