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Nov 23, 2018

Process to sell one of Long Beach port’s busiest terminals begins next month, reports say

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COSCO, owner of the Long Beach Container Terminal – one of the biggest and busiest facilities in North America – will begin the process of selling its Port of Long Beach facility next month, multiple media outlets are reporting.

The terminal’s owner, Chinese investment holding company Orient Overseas International Ltd,. or OOIL, could receive billions of dollars when it sells the terminal, with one estimate coming in at more than $2.4 billion, according to a report by the Journal of Commerce.

The sale is required as a condition of OOIL being sold for $6.3 billion to China Ocean Shipping Co., commonly known as COSCO.

OOIL and COSCO agreed to sell the terminal to appease the U.S. government’s Committee on Foreign Investment in the U.S. after the foreign investment committee expressed concerns about a Chinese state-owned entity taking control of a vital American container terminal.

A sale is expected to close by mid-2019, the JOC and Wall St. Journal said.

A financial adviser with knowledge of the deal told British shipping industry publication Fairplay this week that although giants in the shipping industry are expected to follow the sales process when it starts next month, those making serious bids are expected to include pension funds and investment companies.

Company spokesperson Mark Wong confirmed the sale of the Long Beach terminal is progressing, but would not comment further, according to a Journal of Commerce report. Port of Long Beach and LBCT officials could not be reached for comment Friday, Nov. 23.

LBCT’s new owner would take over a 40-year, $4.6 billion lease with the port that OOIL signed in 2012.

The purchaser of the LBCT would be expected to take over construction of the third and final phase of the Middle Harbor Redevelopment Project, a $1.5 billion effort to remake the Long Beach Container Terminal into a 311-acre mega-facility that can process 3.3 million cargo container annually.

COSCO also has a facility at the Port of Los Angeles, the West Basin Container Terminal, but it’s not being considered for divestment, according to the Wall St. Journal.

Online Edition

COSCO, owner of the Long Beach Container Terminal – one of the biggest and busiest facilities in North America – will begin the process of selling its Port of Long Beach facility next month, multiple media outlets are reporting.

The terminal’s owner, Chinese investment holding company Orient Overseas International Ltd,. or OOIL, could receive billions of dollars when it sells the terminal, with one estimate coming in at more than $2.4 billion, according to a report by the Journal of Commerce.

Oct 15, 2018

NY-NJ PNCT’s new gates halve reefer turn times

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New entry gates opened 11 weeks ago at the Port Newark Container Terminal (PNCT) in the Port of New York and New Jersey that are the latest stage of the terminal’s $500 million upgrade to prepare for an increase in mega-ship calls have already helped halve turn times for refrigerated containers.

The fruits of the upgrade are unfolding as the terminal, in a separate effort to improve fluidity for refrigerated containers, is about to test a program in which truckers and shippers looking to pick up or drop off a reefer at the terminal can pay $80 to do so after the normal closing time in a sort of pay-to-play extended gate. The pilot is part of the terminal’s Flex program, begun in February, which enabled truckers or shippers that paid $95.50 to get one of the first 50 gate slots in the day.

New gates — only two stages

The new gates, which opened July 16, have pared the old three-stage process to two stages, in the process reducing turn times on dry boxes by about 20 percent, terminal officials say.

The gate system is part of a terminal-wide project that includes expanding the terminal’s 263-acre footprint, improving its electrical, global positioning, and Wi-Fi equipment, and adding four super-post-Panamax cranes, two of which arrived in the spring. Two more will arrive in the coming months and 20 new straddle carriers are also set to arrive this year.

All of the port’s four main terminals have undergone varying levels of upgrade in preparation for the surge in mega-ship calls expected in the wake of the opening of the elevated Bayonne Bridge, in June 2017, and the expanded Panama Canal, in June 2016. The elevation of the bridge, from 151 to 215 feet, enabled ships of 9,500 TEU for the first time to reach three of the port’s four main terminals — PNCT, Maher Terminals, and APM Terminals. Before the elevation, vessels of that size could only reach GCT Bayonne.

In a second major upgrade under way at New York-New Jersey, APM Terminals is spending $200 million on a modernization effort that includes four new cranes, an appointment system, and the strengthening of a berth so that the terminal can handle three mega-ships at once.

PNCT officials previously predicted the new gates would cut turn times in the port by 25 percent, and they are confident that they will hit that goal once the final phase of the gate redesign — shrinking the process down to a single stage — is completed in about six months’ time.

“We're optimistic it can go higher than 25 [percent] based on the results we've seen already,” said Chris Garbarino, PNCT’s chief operating officer. The terminal did not release turn time figures.

Mega-ships: potentially large, intense unloading/loading bursts

In the run up to the completion of the Bayonne Bridge project, port stakeholders anticipated that the frequent arrival of big ships, requiring intense loading and unloading of large volumes of cargo in a short time, would stress the port’s equipment supply, drayage fleet, and other resources. So far, however, that has not happened — in large part because although the port has seen an increase in mega-ship arrivals, the rise in cargo flow has not been that large. Many of the cargo loads and unloads have been about the same as those that have arrived on smaller ships in the past.

PNCT said 75 ships that previously could not fit under the bridge have arrived at the terminal in the 15 months since the elevation of the bridge, or about five a month. The number of mega-ships arriving at the port as a whole has surged in recent months. Nearly 19 ships of more than 10,000 TEU a month arrived at the port between May and July 2018, compared with about seven a month from July to September 2017, immediately after the elevated bridge opened, according to figures from the Port Authority of New York and New Jersey.

By the end of the year, PNCT’s development will have increased the terminal’s capacity from 1.5 million TEU, of which the terminal utilizes on average 87 percent, to 2 million TEU, with an increase to 2.3 million TEU by the end of 2019, according to PNCT officials. A wharf improvement project, including the dredging of 400 feet of berth space, will enable the terminal to handle two 14,000-TEU mega-ships at a time, instead of one at present.

The improved reefer turn times stem in large part from a terminal redesign that has put reefer stacks, generating equipment, and labor working on them closer together, and by increasing the number of reefer lanes from two to six, PNCT officials said.

Reefer cargo volumes worldwide grew by 8 percent in 2017, over the year before, and are expected to expand by 4.5 percent a year for the next several years, in part due to a trend towards moving such goods in containers, and away from bulk ships, according to Drewry.

The Port of New York and New Jersey is the largest port on the East Coast by loaded reefer volume. But the port’s market share has declined since 2010, from 23.8 percent to 19.1 percent in 2017, according to data from PIERS, a sister product of JOC.com. In second-place, the Port of Wilmington, Delaware, has also seen its share decline over the period, from 13.4 percent to 12.3 percent, while the share of third-ranked Port of Philadelphia has grown from 7.9 percent in 2010 to 11.2 percent in 2017, the figures show.

New York-New Jersey’s share of the reefer market ticked up to 19.04 percent in the first seven months of 2018, handling 152,802 TEU, the PIERS figures show. The port’s reefer cargo volume increased by 7.8 percent over that period, compared with the period in 2017, PIERS figures show. Wilmington’s reefer share rose to 12.8 percent and Philadelphia increased its market share to 12.34 percent, over the same period, the figures show. The Port of Philadelphia is expected to face a challenge for market share in the coming years from Wilmington, 30 miles or so nearer to the mouth of the Delaware River, where United Arab Emirates-based Gulftainer has signed a 50-year agreement to operate the Port of Wilmington, and spend $600 million to quintuple its cargo capacity.

Possible appointment system

Jim Pelliccio, president and CEO of PNCT, said the terminal is considering implementing an appointment system next year, mainly to improve the flow of information rather than improve fluidity, because the terminals’ new gate system has already done that, he said. GCT Bayonne opened the first appointment system in the port in December 2016.

The gate redesign has freed up workers to focus on other areas, among them the dry-container Flex program, which PNCT officials say has drawn a steady stream of users willing to pay extra to get on of the first slots of the day, usually to pick up or drop off time-sensitive cargo or to ensure they meet a delivery deadline. The program enables truckers to not only start early, but to jump the line of trucks that typically assembles at the terminal gates before it opens at 6 a.m. and get served immediately, Garbarino said.

The program is a smaller, trial version of larger-scale programs used in other ports that offer improved service to beneficial cargo owners (BCOs) that are willing to pay more and also seek to improve the general fluidity of trucks in and out of the port. In Southern California, the ports of Los Angeles-Long Beach are mulling a flat fee of $63.04 per FEU on both the day and night shifts, to replace the congestion pricing fee of $144.14 per FEU that the ports levied 13 years ago on trucks arriving during the day shift.

Other ports are charging a fee to pay for longer gate hours, among them the port of Montreal, which this summer began charging a $35 per container flat fee that enabled the port terminal to open until 11 p.m., instead of closing at about 2:30 p.m. in the past.

The Flex program for reefers is like a smaller version of an extended-gate program. Truckers or BCOs can pay $80 to pick up or drop off a refrigerated container later than the usual closing time of 4:30 p.m. The appointments could be booked by an app on the truckers’ mobile phone that the terminal has developed, similar to the one currently available for the early morning slots, Garbarino said.

“In a lot of cases it's going to generate one additional reefer [move] — receive or deliver one more move by having that additional time,” Garbarino said. “We've talked with some of the trucking companies that handle a lot of refrigerated cargo and there definitely is interest, and they can see that there would be times where they would definitely see the advantage to having an option like that.”

Online Edition

New entry gates opened 11 weeks ago at the Port Newark Container Terminal (PNCT) in the Port of New York and New Jersey that are the latest stage of the terminal’s $500 million upgrade to prepare for an increase in mega-ship calls have already helped halve turn times for refrigerated containers.

Oct 01, 2018

State Updates: Relevant Legislation Moves, Stalls in States; Voters to consider Infrastructure Ballot in November

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California's Governor signed two bills into law, both effective January 1, 2019: one authorizes local agencies to establish an authority for an infrastructure fund and to finance inland port infrastructure; the other holds customers liable should they hire port drayage services who have unpaid wage, tax, and workers' compensation liability. Alaska passed an independent contractor definitition law and created a penalty for misclassification. New York introduced a bill that would empower state police to patrol the Port of New York waterfront and would dissolve the Waterfront Commission. Rhode Island passed a bill prohibitng indemnity agreements in motor carrier transportation contracts. Louisiana unsuccesfully attempted to define motor carrier in transportation contracts. South Carolina had two Port Enhancement Zone Bills die upon adjournment. and Vermont saw five bills concerning the classificiation of employees die upon adjournment.

In November, multiple states will have infrastructure investment measures on their ballots. In Maine, Question 3 on the ballot will ask if the voter favors a $106,000,000 bond issue. $101,000,000 would be used for construction activities on the sate's highway, bridges, and port infrastructure.

In Missouri, voters could elect to increase the state's motor fuel taxes. The funds would be used to enforce traffic laws. Additionally, some of the funds would be used for an Emergency State Freight Bottleneck Fund, which would invest in road improvements.

Meanwhile, back in California, Proposition 6 will ask voters if they would like to repeal Senate Bill 1, which was signed into law in 2017 and increased CA state gas and diesel taxes. SB1 was projected to raise more than $5.2 billion annually for transportation investments in the state of California. Beyond repealing SB1, and ending a significant source of funding for the state's transportation system, Proposition 6 would also require that any future gas tax increases in California be approved by voters, instead in Caliofnira be approved by voters, instead of passed through the state legislature.

The latest state legislative activity is available on the IANA website at www.intermodal.org/resource-center/government-affairs/legislative#stateleg

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Oct 01, 2018

ATA Asks FMCSA to Preempt California Meal and Rest Break Rules

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In late September, the American Trucking Associations submitted a petition to the Federal Motor Carrier Safety Administration, asking the administration to issue a determination that California's meal and rest break requirements would be preempted by federal hours of service rules. Currently, California's requirements would be preempted by federal hours of service ruels. Currently, California's requirements differ from national standards. Stakehholders such as ATA have argued that this inconsistency creates confusion and "undermines safety and unreasonably burdens interstate conmerce."

Following the submission of this petition, 12 members of Congress wrote FMCSA supporting review of the impact of differing state meal and rest break requriements. The bipartisan group of Members from both the Senate and House wrote in their letter that "safety can be undermined when duplicative or conflicting requirements interfere with uniform, clear federal requirements."

FMCSA is seeking comments on this petition, due by October 29, 2019 at www.regulations.gov under docket FMCSA-2018-0304.

Earlier in September, the Pipeline and Hazardous Materials Ssafety Administration granted a National Tank Truck Carriers petition that requested that PHMSA determine that federal HOS regulations preempt California's meal and rest break laws for those moving hazardous materials. During their investigation, PHMSA found tha California's laws are inconsistent with Hazardous Materials Regulations and are therefore expressly preempted by federal law.

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Jun 05, 2012

Canadian Pacific Rail Resumes Operations

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About 4,800 striking Canadian Pacific Rail workers have returned to work following the passage of the Restoring Rail Service Act, legislation that forces members of the Teamsters Canada Rail Conference union to return to their jobs.

According to CP Rail, operations resumed without incident at about 7 am June 1 across the company’s Canadian freight network in response to passage of the legislation, which became law May 31. It was passed last Thursday by the Canadian Senate.

Earlier in the week, the House of Commons also approved the bill, which mandates that the union and railway submit to binding arbitration, and that the government-appointed arbitrator has 90 days to construct a deal.

The Restoring Rail Service Act had been drafted in response to the nationwide strike, which began May 23 and suspended freight service across the country by CP, Canada’s second-largest railway. The strike was launched by the Teamsters Canada Rail Conference in response to an impasse with railway management during contract talks.

Among the issues the union and management had struggled with during contract talks were pensions and fatigue management, according to negotiators.

The Teamsters Canada Rail Conference represents bargaining units of nearly 5,000 workers – 4,200 locomotive engineers, conductors, trainspersons and yardmen, as well as 220 rail traffic controllers. The collective agreements for both units expired at the end of 2011.

The labor unrest came at a very inopportune time for Canadian Pacific, which just appointed an interim CEO about a week before the strike was launched, and also elected a new 16-member board of directors.

Former CEO Fred Green resigned from CP Rail May 17 after a four-month battle over control of the direction of the company with activist investor Bill Ackman.

In other Canadian Pacific news, the railway elected a new chairman of its board of directors, Paul Haggis, on June 4. Haggis has extensive financial markets and public board experience and is currently Chairman of the Alberta Enterprise Corp. and CA Bancorp. He also is a corporate director of other public and crown corporations, according to CP Rail, including Advantage Oil & Gas.

Online Edition

About 4,800 striking Canadian Pacific Rail workers have returned to work following the passage of the Restoring Rail Service Act, legislation that forces members of the Teamsters Canada Rail Conference union to return to their jobs.

According to CP Rail, operations resumed without incident at about 7 am June 1 across the company’s Canadian freight network in response to passage of the legislation, which became law May 31. It was passed last Thursday by the Canadian Senate.

Nov 12, 2018

Long Beach clean water projects to receive millions of dollars in port grant funding

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Four stormwater control projects that aim to improve water quality in and around Long Beach will receive a total of $3 million from the Port of Long Beach as part of the port’s latest round of community grant funding, the port said Tuesday, Nov. 13.

The port’s five-member harbor commission unanimously approved the funding. Recipients include the City of Long Beach’s Public Works Department, which is receiving $1 million for its Long Beach Municipal Urban Stormwater, or LB MUST, treatment project. LB MUST aims to improve water quality by intercepting and treating wastewater flow during dry weather and stormwater runoff that normally discharges into the Los Angeles River. The project also includes adding about five acres of new coastal marsh and migratory watering areas by the river.

Also receiving $1 million is the Rancho Los Cerritos museum and garden in Long Beach’s Los Cerritos neighborhood, which plans to use the funds for a type of pavement that allows liquids to pass through it, plus an underground water storage tank.

Receiving $603,441 is the Long Beach Council of Camp Fire, which runs summer camp and club programs for local children, as well as community outreach programs. Its grant goes toward an environmentally friendly parking lot. Green parking lots typically have parking surfaces that allow better drainage of water than standard ones.

Additionally, the Willmore City Heritage Association will receive $440,000 for construction of a system that would use grass or other dense plants to filter out sediment and oily materials at the Willmore Heritage Garden at Seventh and Maine streets. It opened in 2012 as part of a neighborhood beautification project.

Online Edition

Four stormwater control projects that aim to improve water quality in and around Long Beach will receive a total of $3 million from the Port of Long Beach as part of the port’s latest round of community grant funding, the port said Tuesday, Nov. 13.

Nov 15, 2018

Ontario airport surpasses Atlanta to become nation’s busiest outbound freight hub

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Ontario International Airport has always been a busy freight hub, but for at least one month it was the nation’s busiest for outbound shipments.

According to a monthly survey by FreightWaves, a trade journal that tracks the movement of goods, 4.63 percent of all goods shipped by American airports in October were loaded onto planes taking off at Ontario. In Atlanta, which had been the market leader for most of 2018, the outbound tally was 4.51 percent.

Air freight volume has increased sharply, on a year-to-year basis, in the two years since the Ontario International Airport Authority took local control over the Inland Empire’s main airport.  According to an ONT statement, in the first nine months of the year, 521,705 tons of freight volume moved through the airport, an 18 percent increase over the same period in 2017.

“Those operations are huge, and they’re growing. The tonnage is spectacular,” said economist John Husing, who monitors the Inland Empire’s logistics industry. “Part of the growth has to do with e-commerce, but it’s also imports in general, which are growing.”

United Parcel Service and Federal Express both operate regional shipping hubs at ONT, and Amazon also moves a considerable amount of goods there. Airport officials approved a 30-year lease arrangement with FedEx in June, and the company plans to develop 50 additional acres on the northeast side that will nearly triple Fed Ex’s current operating space, according to the ONT statement.

Much of the volume comes from freight that is unloaded at the ports of Los Angeles and Long Beach and shipped on surface routes to the airport to be transported across the country, usually with stops in Inland warehouses.

Atlanta, which has one of the country’s largest airports, has been rated the busiest for outbound freight for most of the year, but according to FreightWaves’ research, the city had a slack October.

“The western ports have been overloaded with inboard containers from China, and this is a large factor why we are seeing this changing of the guard,” FreightWaves’ Zach Strickland wrote in his report. Analysts have noted a surge in foreign shipments as importers try to move more good in advance of possible tariffs.

Also, much of the goods offloaded at East Coast ports tend to travel only a few hundred miles to their final destination. Shipments to the West Coast often are shipped all over the country. Strickland also wrote that truck drivers could flock to the West Coast during the holiday season because there would be more work there.

After Los Angeles World Airports gave up control of ONT, local officials initiated a marketing campaign to increase both passenger and freight traffic, and Mark Thorpe, CEO of the airport authority, said it’s working on multiple fronts. To increase passenger flights, representatives travel to airline offices around the world pitching ONT, he said.

Advertising flight options to local travelers can vary, Thorpe said. China Airlines, which provides flights to Taiwan, prefers ads in traditional media, while JetBlue, which recently added routes to and from New York, uses social media and other more modern means.

There’s also the convenience advantage, Thorpe said, especially for passengers in places such as Orange County and the San Gabriel Valley.

“We try to have them think of about the value of time,” Thorpe said. “Is it really worth four hours on the road to save $100 on a ticket?”

On the freight side, Thorpe said the marketing is more of a business-to-business nature, which includes working with the established freight companies. When that happens, ONT is able to play to the Inland Empire’s strengths, which include the large network of warehouses and freeways that border the airport on three sides.

“That’s marketing,” he said. “You do the most you can do with the resources available, and you don’t try to be all things to all people.”

Online Edition

Ontario International Airport has always been a busy freight hub, but for at least one month it was the nation’s busiest for outbound shipments.

According to a monthly survey by FreightWaves, a trade journal that tracks the movement of goods, 4.63 percent of all goods shipped by American airports in October were loaded onto planes taking off at Ontario. In Atlanta, which had been the market leader for most of 2018, the outbound tally was 4.51 percent.

Oct 15, 2018

Classification Concern - New Jersey law on trucker classification has owner-operators on edge

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Port and trucking leaders are watching for any impact on the already stretched drayage fleet at the Port of New York and New Jersey from a new state rule that truckers say will make it more difficult for owner-operator drivers to prove they are independent businesses rather than employees.

The rule, which took effect on Sept. 17, erased an existing state rule known as the 20-factor test that the New Jersey Department of Labor formerly used to determine whether an independent contractor was truly independent, or actually so much under control of a trucking company that the company was effectively an employer and the driver an employee.

Owner-operators now have to ask the Internal Revenue Service (IRS) for letter stating they are an independent operator, or provide an IRS audit that shows it, to prove their independence to obtain exemption from federal employer taxes.

Whether that change will have a significant effect on the port's fleet and its ability to handle growing cargo volume - which increased 8.2 percent in the first seven months of this year - is unclear. The number of trucekrs affected, however, is potentially large: Trucks transport about 85 percent of the port's cargo, and independent contractors operate about 85 percent of the roughly 9,000 trucks that serve the port.

Drayage capacity at New York - New Jersey and other big US ports has tightened dramatically because of a driver shortage that has plagued all of trucking for year, rising cargo volumes, and the requirement that drivers document their hours with electronic logging devices.

The Teamsers union, which pushed for the rule change, believes a large proportion of the port's owner-operators could be found o be employees under the new rule. Truckers say the impat could range from merely creating an "administrative headache" for drivers to prompting some to leave the port, and perhaps the indusstry. John Nardi, president of the New York shipping Association, which opposed the rule change, said it will be watching for impacts from the new rule, and is concerned that it will prevent the port from having robust drayage capacity.

However, the New Jersey Labor Department, which declined to comment on the rule change, depicted it in the New Jersey Register, where its enactment was reported, as a relatively minor rule adjustment that would clarify confusion over the problem of the state interpreting federal rules.

The impact of the rule may also be muted by the fact that the issue of classification mainly emerges when the New Jersey Labor Department conducts an audit of a company, a relatively infrequent occurrence.

The rule reflects a battle waged sporadically at US ports over whether owner-operator drives are independent businesses or are actually employees of drayage companies.

Tests to determine whether a worker is an independent worker, or is an employee - andwhether they are misclassified - focus on the control exerted by the contracting company over the worker. In the trucking context, that generally includes issues such as whether the driver works for more than one company, the control they have over their workflow and what jobs they take, and who bought or funded the purchase of their truck and other equipment.

Companies misclassify employees for reasons including an effort to avoid paying overtime, vacation time, and other benefits companies would be requred to pay if the drivers were classified as employees.

At a minimum, trucking leaders say the new rule presents another burden on independent operators, who are by nature small operators with few extra resources with which to handle a required application to the IRS.

"It's more a difficult path... It just makes it more difficult in an industry already suffering from a lot of other difficulties," said Gail Toth, executve director of the New Jersey Motor Truck Association, which opposes the rule change. "we've had people that submitted a request to the IRS and they never got answered...It just seems to be a maneuver to make it much more difficult for people to be independent contractors in the state of New Jersey."

At worst, the rules could push independent contractors that fail the test - and are found to be employees - out of the port, said Tom Adamski, agent for First Coast Logistics, who represents the NJMTA's intermodal council.

"It will drive people out of the business without quesstion," said Adamski, who said the port's drayage fleet has been built on the fact that New Jersey's regulations have made it relatively easy for owner-operators to exist. He suggested that drivers who face difficulty obtaining the IRS designation may opt to ply their trade in nearby ports, such as Philadelphia or Baltimore. And some truckers designated as employees may leave drayage and take a position in other sectors of the trucking industry that are more lucrative, he said.

Edisson Villacis, an independent drayage operator in the Port of New York and New Jersey who runs a Facebook page for drivers, said he doesn't believe many independent operators want to be employees because they're reluctant to give up the ability to set their own hours and workloads - reasons they got into the business in the first place.

John Vreeland, a labor attorney whose firm has handled transportation cases in New Jersey, said he believes the rule is a "pretty big change," with potentially sweeping consequenes. Truckers may be reluctant to seek the IRS designation, fearing that an adverse ruling could trigger an audit of their past tax payment practices, and may therefore face a tougher test if later confronted by the Labor Department, he said.

Print Edition

Port and trucking leaders are watching for any impact on the already stretched drayage fleet at the Port of New York and New Jersey from a new state rule that truckers say will make it more difficult for owner-operator drivers to prove they are independent businesses rather than employees.

Oct 24, 2018

Ports Group Supports Senate Bill 3587

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The American Association of Port Authorities (AAPA) … the unified and recognized voice of America’s seaports … today voiced strong support for a bill (S.3587) introduced on Oct. 11 by Sen. Tom Carper (D-Del.), the ranking Democrat on the Environment and Public Works Committee. His proposed legislation would enhance the nation’s freight systems by making key investments in ports, railways and intermodal hubs.

Specifically, S. 3587 aims to improve the Nationally Significant Freight and Highway Projects Program, also known as INFRA, which was created as part of Fixing America’s Surface Transportation (FAST) Act.

“The American Association of Port Authorities strongly supports Senator Carper’s legislative initiative that repeals the multimodal cap on the discretionary grant program created in the FAST Act,” said AAPA President and CEO Kurt Nagle. “Sustainable multimodal funding is a top AAPA priority and the association greatly appreciates the senator’s work to advance legislation that is both timely and very much needed.”

Of the $11 billion of freight funding provided in the FAST Act, only $1.13 billion is multimodal eligible, and of that, only $200 million in multimodal eligibility remains available for INFRA grants.

In an August 29, 2018 letter to Sen. Carper, Mr. Nagle wrote that AAPA appreciates the senator’s work on the FAST Act that created the first freight funding program in which ports are eligible recipients. “To build off the work in the Fast Act,” said Mr. Nagle, “AAPA believes that freight program funding should be 100 percent multimodal.” He added that since the FAST Act required states to complete state freight plans to receive additional FAST Act funding, 90 percent of states have complied. “This signals that states recognize the value of multimodal projects, and they recognize that ports are the linchpins for this activity.”

Cargo activities at America’s seaports are significant drivers of the U.S. economy, supporting more than 23 million American jobs and generating over $320 billion in annual federal, state and local taxes. All but 1 percent of the nation’s overseas trade moves through its maritime facilities, and U.S. seaport cargo activities account for more than one-quarter of the nation’s Gross Domestic Product.

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Sep 24, 2018

Tariffs To Hit About One-Fifth Of Cargo Traffic At San Pedro Bay Ports

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As much as 23% of cargo moving through the Port of Long Beach and more than 20% of cargo at the Port of Los Angeles stand to be affected by tariffs on $200 billion worth of Chinese imports announced by the Trump administration on September 17, according to port representatives.

The 10% tariffs are in addition to 25% tariffs on $50 billion worth of Chinese imports enacted earlier this summer. Shortly after those were enacted, the Chinese government responded with in-kind tariffs against American exports to its country.

Mario Cordero, executive director of the Port of Long Beach, said the port had anticipated the new tariffs, as Trump had previously threatened them. However, he noted that originally Trump had proposed 25% tariffs on $200 billion worth of Chinese imports, rather than 10% tariffs.

But in the official tariff announcement, Trump stated that he would consider increasing the tariffs to 25% if the Chinese government did not act to change its “unfair” trade practices. The president has taken issue with the trade imbalance between China and the United States, as well as what he has characterized as China’s flagrant practice of stealing American intellectual property.

“I believe there will be an impact because we are now at a level of tariffs that are going to apply to a number of commodities across the board which will, in this particular case, come down to the American consumer in terms of additional cost,” Cordero told the Business Journal. “It’s concerning. On the other hand, there is some relief, so to speak, in that the administration has specifically referenced 300 commodities that have been exempted from this particular tariff application.”

Prior to the announcement of additional tariffs, Cordero had forecasted that the Port of Long Beach would exceed overall cargo volumes compared to last year. “Our forecast right now is we are going to continue with positive growth. . . . I’ll stick to that forecast, but we will see what the impact of this latest application of tariffs will have,” he said.

“More than 20% of the total trade value at the Port of L.A. is exposed to the tariffs, meaning that 20% of the items coming into the port from China would be exposed to those tariffs,” Phillip Sanfield, director of media relations for the Port of Los Angeles, told the Business Journal. “That equals about $43 billion of trade value or about 1.4 million container units.”

Sanfield continued, “Our position in general on the tariffs is the port supports effort to engage our training partners abroad to create a rules-based investment system that provides fair and equitable access to foreign markets for U.S. businesses.” In other words, he explained, negotiated talks or settlements instead of tariffs are the best course to resolve trade issues without causing instability.

Cordero reflected, “One of the things that is coming is the holiday shopping season. That’s going to be a true measure in terms of what this impact is, because, ultimately, our economy is based on consumer demand, in large part. So we will wait to see what the consumer answer is.”

If China retaliates, Trump stated that he would impose tariffs on $267 billion of additional Chinese imports.

Print Edition

As much as 23% of cargo moving through the Port of Long Beach and more than 20% of cargo at the Port of Los Angeles stand to be affected by tariffs on $200 billion worth of Chinese imports announced by the Trump administration on September 17, according to port representatives.

The 10% tariffs are in addition to 25% tariffs on $50 billion worth of Chinese imports enacted earlier this summer. Shortly after those were enacted, the Chinese government responded with in-kind tariffs against American exports to its country.