A bill that seeks to halt shipping fees charged by the Port Authority of New York and New Jersey has been passed by New Jersey's Assembly and Senate.
New Jersey Sen. Bob Gordon and Sen. Nicholas P. Scutari say the bill is needed to protect the competitiveness of the port.
The bill was approved Monday by the New Jersey Assembly by a vote of 79-0 and by the New Jersey Senate, by a vote of 37-0, last June. It now heads to the desk of Gov. Chris Christie. The bill would take effect immediately, if signed, but would
remain inoperative until similar legislation is enacted by the State of
New York. A similar bill, S.6156 has been introduced in the New York by New York State Senator Michael H. Ranzenhofer.
The bill would prohibit the Port Authority of New York and New
Jersey from imposing a cargo facility charge on users, ocean common
carriers and marine terminal operators without a written mutual
agreement between that user, ocean common carrier, or marine terminal
operator and the Port Authority. It would also prohibit the imposition of cargo facility charges on rail carriers
The bi-state port "supports commerce, jobs and promotes economic activity in our state. We have to make sure we are protecting its long-term viability,” Gordon said.
The Port Authority's cargo facility charge amounts to $4.95 for
20-foot containers, $9.90 for 40-foot containers, and $1.11 per unit for
Shortly after the fee was imposed, a number of
carriers, including China Shipping Container Lines, Hanjin Shipping
Company and United Arab Shipping Company, filed a complaint with the
Federal Maritime Commission. The carriers argued that cargo lines should not be made
responsible for investments in rail, roadway and security improvements,
to which the fee revenue is dedicated. The case is still in the
discovery phase before an administrative law judge. According to a published report, the fees have cost one shipping
line, Maersk, which imports fruit to the U.S. from South Africa, more
than $4 million.
“By imposing a tax on ocean carriers, the authority has driven up the cost of doing business locally and driven freight to other ports along the East Coast," Gordon claimed. "This threatens the future success of the port and the hundreds of thousands of local jobs that people in our region depend on. We should be looking to make the port stronger and more competitive, and repealing this fee will go a long way toward doing that.”
Richard M. Larrabee, director of the Port Commerce department, said last year that the fee generates about $30 million per year
and creates a reliable funding source for
improvements that have to be made at ports but do not generate
revenue, such as dredging construction of roads.
“It certainly doesn’t pay for everything, but it is a step in the right direction,” he said.
Larrabee said the Maritime Transportation
Systems National Advisory Committee
recommended to the U.S. Secretary of Transportation that the country create
a national freight strategy and a “reliable source of funding” for
ports similar to what airports and highways have.
The senators noted that the legislation is critical to ensure the port’s competitiveness, given the impending widening of the Panama Canal, a project expected to be completed in 2015 that will allow larger, more modern ships to pass through the port.
“We will have the opportunity in the coming years to compete with ports across the country for business that will result from the Panama Canal widening project,” Scutari said. “We have to ensure that we are not putting our state at a disadvantage by imposing fees on cargo that are not assessed on carriers at other ports. Abolishing the fees will protect the competitiveness of the Port of New York and New Jersey and the hundreds of thousands of local jobs that it supports.”