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Dear
OffPeak Users,
With the
announcement of today's adjustment in the OffPeak Traffic
Mitigation Fee, we've received some requests for
clarification on one point. As announced, the TMF is being
adjusted to $50 per TEU (twenty-foot equivalent unit), up
from the original $40 per TEU rate. This translates into a
rate of $100 per FEU (forty-foot equivalent unit or larger).
Please see the message below for more information.
Sincerely,
Bruce
Wargo
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Dear
OffPeak Users:
Today we
are announcing an adjustment to the current Traffic
Mitigation Fee (TMF) assessed on container traffic using
marine terminal day gates under the OffPeak program. This
adjustment, which will go into effect April 3, comes after
the first regular review of program costs since OffPeak was
launched in July of last year. The new TMF rate will be
$50.00 per TEU (twenty-foot equivalent unit), or $100 per
FEU (forty-foot equivalent unit or larger), up from the
original $40.00 per TEU rate. Those fees collected are used
to finance the labor, operational and administrative costs
of the very successful OffPeak night gate and Saturday gate
operations at the Ports of Los Angeles and Long Beach.
From the
kick-off of the OffPeak program, we have said PierPASS will
regularly review the program costs and adjust the TMF as
needed. As planned, PierPASS conducted its first audit of
the OffPeak program, working with the independent industrial
engineering firm the JWD Group. The initial $40.00 per TEU
rate was based on a 2004 market analysis and in-depth
consultation with marine terminal management. It was the
best estimate possible in the existing business and trade
environment. However, as the review demonstrated, the
realities of current labor costs, coupled with our increased
understanding of the actual operations of the OffPeak
program, establish that an adjusted fee is necessary to run
a balanced operation.
It is
equally significant to remember that our best estimate at
the outset of OffPeak was that we would divert 15 to 20
percent of our daytime movements to nights and weekends by
the end of the first year. Yet, during the first six
months, between 30 and 35 percent of all gate activity went
to OffPeak operations.
In the
end, the fee adjustment is both a testament to the
achievement of OffPeak to move container traffic in a new
way and a challenge to marine terminals to improve
operational efficiency and make every dollar count. We all
have something at stake in this program's success. And I'm
happy to say it is working.
Additional
information on the TMF adjustment may be found in the Q&A
below and in the document "TMF Adjustment Overview"
available on the PierPASS website, www.pierpass.org.
Thank you
for your continuing support and cooperation. PierPASS is a
success because of your good work.
Sincerely,
Bruce
Wargo
President and CEO
PierPASS,
Inc.
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Traffic Mitigation Fee Adjustment - Questions & Answers
· What is the Traffic Mitigation Fee?
The
Traffic Mitigation Fee (TMF) is a financial assessment
administered through PierPASS Inc., a not-for-profit
company, on loaded non-intermodal cargo containers entering
or exiting the marine terminal gates at the Port of Los
Angeles and the Port of Long Beach during the designated
peak hours of 3:00 a.m. to 6:00 p.m., Monday through
Friday.
·
What is the Traffic Mitigation Fee used for?
Proceeds
from the TMF (minus overhead costs of running the program)
are allocated by PierPASS to finance the labor and
operational costs of the OffPeak program gates, weeknights
Monday through Thursday and Saturday at both the Port of Los
Angeles and the Port of Long Beach.
OffPeak is
an after-hours cargo shipping program administered by
PierPASS that provides a financial incentive for cargo
owners to move cargo at night and on weekends. The program
was initiated to reduce truck traffic, alleviate port
congestion and cut pollution from idling trucks during peak
daytime traffic hours.
·
Who pays the Traffic Mitigation Fee?
The TMF is
paid for by beneficial cargo owners (shippers, consignees or
their agents). The fee is not assessed against containers
subject to the Alameda Corridor Transportation Authority (ACTA)
fees, empty containers and chassis, domestic containers or
trans-shipments. Trucking companies and water carriers are
not responsible for TMF payments.
· How much is the Traffic Mitigation Fee?
As of
April 3, 2006, the TMF will be set at $50.00 per TEU
(twenty-foot unit equivalent), or $100 per FEU (forty-foot
equivalent unit or larger). At the initiation of the OffPeak
program, the TMF rate was set at $40.00 per TEU. However,
as a result of financial information gathered through the
program's first audit, the fee required an adjustment to
meet the costs of continuing the after-hours traffic
program.
· Why is the TMF being increased?
Based on
findings reported in an audit of the OffPeak program's
operation by the JWD Group, an independent industrial
engineering group, the actual TMF needed to fund the OffPeak
program is higher than the originally established cost of
$40.00 per TEU. The current adjustment to $50.00 per TEU
reflects a reality in which PierPASS is moving to better
cover the costs of the program while simultaneously
supporting an increase in efficiency in the terminal
operations.
· Is PierPASS going to make a profit from this new
fee structure?
No. PierPASS is a not-for-profit
company. The mission of the PierPASS is to administer a
financially balanced and fully sustainable program. The
upgrade in the TMF will allow this goal to be achieved.
· Was this fee increase planned?
The plan
has always been to adjust the TMF up or down as needed to
cover the cost of the program and ensure its operational
success. An independent review was planned to assess the
financial situation of the program after the first quarter
of operation. This review showed that an adjustment of the
TMF was needed to keep OffPeak viable and successful.
PierPASS will continue to review the financial structure of
the program on a regular basis.
· Has the OffPeak program been successful so far?
Yes.
OffPeak has wildly exceeded expectations and promises to
continue benefiting the import-export industry in Southern
California, making growth more efficient and more
manageable. Within the first six months of operation, night
gate and weekend gate use for the two marine terminals
skyrocketed to between 30 percent and 35 percent of all
marine terminal gate activity. By way of comparison, our
initial target was a shift of only 15 to 20 percent in the
first year.
On
December 10, PierPASS reached its million-truck milestone.
In less than five months, one million trucks hauling
shipping containers into or out of the marine terminals at
Los Angeles and Long Beach had been removed from daytime
traffic, reducing traffic congestion and alleviating port
congestion.
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