Maritime Labor Costs

News recently broke out that the West Coast MTO Agreement is raising the PierPass Traffic Mitigation Fee (TMF). The increase is expected to be 8.1% and will only be taking place at the Ports of Los Angeles and Long Beach. Ocean freight rates at those ports will change. Both of these ports are among the most active shipping centers on the West Coast. According to reports, expect to see the TMF to increase by $5 for containers that are 20 feet and $10 for containers that are 40 feet. The increase commences on August 19, 2013.

International freight shippers are not happy with these type of fee increases and question the reasons behind the increase. What shippers need to understand is that the rising costs behind maritime labor are the main attributors for these specific rate increases. According to the PierPass program, which was established in 2005 to minimize port congestions, the fees will cover the costs associated with night and weekend terminal shifts for workers. Shippers might be able to avoid the added fees if they move their cargo during non-peak hours (before 3am and after 6pm during the week or anytime during weekends).

While this specific increase is only occurring on the west coast, increases could happen at anytime at any port in the United States because of the rising cost of maritime labor. For smart shippers, you should consult with a trusted freight forwarder who can help guide you through any new fees and give you the best rate for you.