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FROM OUR CORRESPONDENTNORTH AMERICA


Port demands lose touch with reality


From Ian Putzger, our regional correspondent in


NORTH AMERICA


Shipping operators are being threatened with a double blow in the USA: ports want to increase their fees, while crippling industrial action is expected as port workers also demand more cash.


quirks. Today observers may be tempted to ask which planet the California Association of Port Authorities believes it is on. The organisation, which represents California’s 11 publicly owned commercial ports, has been pushing for a mechanism that would usher in automatic annual increases in rates for port tenants – without public debate and regardless of the state of the industry or the economy overall, or any


A www.heavyliftpfi.com


mericans outside California have often been inclined to regard the US West Coast state as a microcosm from an altogether different galaxy prone to freakish


other parameters that have an impact on port costs and competitiveness. Not surprisingly, port users are up in arms over the scheme. Industry bodies like the Pacific Merchants Shipping Association and the Los Angeles Customs Brokers and Freight Forwarder Association have issued statements condemning the plan and urging US legislators to block it.


Losing market share


In a letter to the Los Angeles Harbour Commission, the broker and forwarder body has pointed out that the proposed


automatic rate hike mechanism comes at a time when California ports are continuing to lose market share to other ports. Instead of bringing in automatic fee increases, the ports should offer more incentives to attract cargo to the state, it argued.


If anything, criticism from the project forwarder camp is even more scathing. “The people who are making these decisions are not in tune with the shipping world and how it operates,” one forwarder commented. Of course, nobody on the receiving end likes fee hikes. To start with, they play havoc with budgeting and produce additional administrative work. At best they are a nuisance, and they can be painful if it is impossible to pass them on. Still, operators can understand why ports levy fees and why they are inclined to raise them from time to time. When it comes to automatic increases – decoupled from economics and removed from any meaningful negotiation – operators are understandably agitated. While they themselves are pushed to squeeze any unnecessary cost out of their activities, the idea that a port can just raise charges without any justification is bound to drive them to the barricades.


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