California Passes Bill to Charge $30/TEU Cargo Fee at Ports

6 August 2008

The California Legislature has passed a bill (SB974) that requires the Ports of Los Angeles, Long Beach, and Oakland to collect a user fee of $30 per twenty-foot equivalent unit (TEU) from the owner of container cargo moving through the Port of Los Angeles, the Port of Long Beach, or the Port of Oakland.

Half of the funds collected by the Ports will be applied to congestion relief projects, half to air-quality improvement projects, albeit thorough different mechanisms.

The bill requires the Ports of Los Angeles and Long Beach (San Pedro Bay Ports) to transmit half the funds resulting from the fee to the San Pedro Bay Ports Congestion Relief Trust Fund and half to the San Pedro Bay Ports Mitigation Relief Trust Fund, which funds the San Pedro Bay Ports would be required to establish.

The bill requires the Port of Oakland to transmit the funds it collects to the Port of Oakland Port Revenue Fund established pursuant to the City of Oakland City Charter.

The different funds are required to provide the financing for projects that improve the flow and efficiency of container cargo in and out of the Ports, and for the mitigation of air pollution associated with the movement of container cargo in and out of the Ports.

In 2007, the Port of Los Angeles moved 6,017,812 loaded TEUs; the Port of Long Beach moved 5,278,834 loaded TEUs; and the Port of Oakland moved 1,779,917 loaded TEUs. Under the bill, that traffic would have resulted in user fees of more than $392 million.