Higher Costs and Scrutiny For Containers

Though a deadline had passed for comments on the California bill that would tax ocean containers using the ports of Los Angeles and Long Beach an additional $30 per twenty-foot-equivalent unit (TEU), the National Industrial Transportation League (NITL) noted Governor Arnold Schwarzenegger’s staff indicated they still needed to hear from individuals who may be impacted by S.B. 927. That bill, which passed the California legislature, will impose the tax on cargo owners.

In its response, NITL informed the governor that the tax could cause shippers to divert cargo to other ports outside California, which would have a negative impact on the state economy. In addition, NITL’s Peter Gatti stressed the cumulative cost impacts of port users resulting from programs like PierPASS.

NITL urged shippers to quantify actual and potential diversion plans they would employ if the governor signs the bill. NITL was also working with other groups that are concerned for how the California tax could affect other states that may seek to establish similar taxes on containerized freight moves.

In separate news, the Department of Homeland Security (DHS) stated it plans to scan 98% of cargo at U.S. ports by 2008. By the end of 2006, DHS estimates 75% of ocean cargo will be scanned by Radiation Portal Monitors. There are currently over 250 monitors in place at U.S. ports.

For more information on the California Container Tax:

$60 Container Tax Added At California Ports (9/12/2006)

California Bill Would Tax Containers (9/6/2006)

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