The Port of Long Beach is rolling out programs aimed at both: encouraging the newest and cleanest oceangoing vessels to continue moving cargo through the West Coast seaport; and providing financial incentives to reduce heavy emissions caused by ships in and around San Pedro Bay.
The Long Beach Harbor Commission at its July 2 meeting approved a “dockage incentive program,” which caps daily dockage fees for the world’s largest ships, and a “wharfage incentive program,” which rewards ocean carriers that move additional cargo by rail. Both programs are expected to go into effect starting August 1.
The dockage incentive includes capping daily dockage fees at $8,641 per day for ships longer than 345 meters, or 1,132 feet. At the current rate, the largest vessels, which typically carry 13,000 twenty-foot-equivalent container units or larger, would have to pay more than $11,000 per day in dockage fees. The port estimates the incentive is expected to cost the port about $438,672 in lost fee revenue.
There are few ports in the United States other than the Port of Long Beach with the capabilities and “deep water” channels to handle such massive ships that are lengths the size of the Empire State Building. Port staff said larger ships provide more capacity for ocean carriers and are more cost effective and efficient than smaller ships, since carriers are able to load more cargo and cut down on fuel and operational costs.
The port launched a “Big Ship Ready” advertising campaign this year, aimed at showcasing the port’s infrastructure and capabilities at a time when competition among West Coast ports for discretionary cargo – and the associated international trade related jobs – has continued to threaten the Port of Long Beach’s market share, port staff said.
Harbor Commissioner Rich Dines said the incentives are timely. “The truth is, big ships are calling now; they’re coming today,” he said, noting that the massive MSC “Fabiola” docked at the Long Beach port in March before leaving on its route for the Port of Oakland. Another large ship came to Long Beach a few months later.
Meanwhile, the wharfage incentive program rewards ocean carriers with a $10 incentive for every additional cargo container they move by rail through Long Beach between August 1, 2012, and July 31, 2013. The incentive is designed to encourage carriers to ferry more cargo through Long Beach and increase the use of rail, which port officials consider less polluting than trucks, on a per-container basis.
Green Ship Awards
The harbor commission also approved a new “green ship award program,” which was drafted in order to meet new goals set forth by both the ports of Long Beach and Los Angeles to attract newly built ships that meet the most up-to-date, strictest environmental engine standards.
Currently, cargo ships with dirty diesel, “bunker” fuel-burning engines remain the “biggest contributor” to air pollution from the San Pedro Bay and account for 64 percent of all port-related diesel particulate matter and 59 percent of nitrogen oxides, which leads to smog, according to port staff.
The port’s program, which launched this month and will continue through June 30, 2013, now provides incentives of $2,500 to $6,000 to vessels with the cleanest main engines and provides recognition to the best performing shipping lines. The program is expected to cost the port about $292,000, port staff estimates. The program is in addition ship-to-shore electrical power being installed at berths and the port’s other emission-reducing initiatives that encourage ships to use low-sulfur fuel and reduce speeds off the coast.
Although very few ships calling at the port have Tier 2 engines, which provide a 15 percent reduction in ship emissions, port staff believes more of the cleaner fuel-burning vessels will start making their way to the port within the next year. Tier 3 engines, on the other hand, may take longer to arrive, since the technology isn’t required through the International Maritime Organization until 2016.
Fuel Tax Exemption
Meanwhile, a bill introduced by State Sen. Alan Lowenthal – SB 1243 – seeks to extend the sunset date for exempting shippers from paying sales tax on marine bunker fuel until January 1, 2024. The current exemption is scheduled to end on January 1, 2014.
The Long Beach City Council voted 7-1, with Councilmember Gerrie Schipske dissenting, to support the legislation during a June 25 meeting. Business representatives and city officials said taxing shippers for buying fuel, as done previously in the state, will only cause a loss of state revenue and force out hundreds of jobs, because many shipping companies will simply stop buying fuel from state sources since they can purchase it cheaper elsewhere around the world.
Source: Long Beach Business Journal