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Ports told: Set box fees as revenue
Wednesday, May 4, 2005
Traffic World
Peter T. Leach
Journal of Commerce
JERSEY CITY -- Because its is getting more difficult to get state or federal funding for port infrastructure improvements, private port and terminal operators on the East Coast should begin to adopt per-container user fees to generate revenue streams that would be dedicated to such projects, a prominent transportation economist said.
Dr. John Ricklefs, vice president and chief economist of Moffatt & Nichol, said private-sector solutions offer the best alternative to funding port improvements now that federal and state budgets are so constrained and tax increases are not an option.
Ricklefs spoke Tuesday at the 2nd Annual Trans-Atlantic Maritime Conference sponsored by The Journal of Commerce.
What he called a Container Facilities Charge would have to be crafted so that it was not seen as a tax on global trade, which would be unconstitutional, but as a fee that would be set aside for infrastructure improvement.
Such revenue streams would enable ports and terminal operators to issue municipal bonds under the aegis of their local port authorities that could be funded out of the dedicated fees and used to finance projects.
Ricklefs said the charge would be paid by carriers who would then pass the fee along to shippers. "Prices will have to go up to pay for removing bottlenecks," he said.
Ricklefs made his recommendation as part of a panel that was looking at solving the problems of congestion at East Coast ports.
William A. McLean, vice president of operations for the South Carolina Ports Authority, said reducing dwell time was his number one priority. "If Charleston could cut the dwell time on containers by 50 percent, it would give us 52 additional acres of yard space that would enable us to reduce turn times," he said.
Paul Breeman, director of planning, Holt Logistics Corp., said there is some extra capacity at East Coast ports, especially among ports that are not the major load centers, which could absorb additional throughput over the next four years. "That would give us time to come up with additional capacity," he said. Breeman said the overall volume at East Coast ports is growing by 8 percent a year.
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