Statement of Chairman Daniel B. Maffei on Proposed PierPass Change
On January 24, 2022, the West Coast Marine Terminal Operator Agreement (WCMTOA) counsel filed an amendment to the agreement that would make permanent an incentive program for off-peak gate use that was set to expire on January 31. Agreement parties claim that they were asking for this extension at the request of President Biden’s Port Envoy.
I fully support the President’s Port Envoy and his efforts to work with the industry to find ways to reduce congestion including an incentive for greater off-peak gate use. However, neither he nor others advocating off-peak gate incentives could have known that PierPass’ proposed fee structure generates revenue well above what is currently required to implement the program in a revenue-neutral manner. PierPass claims to be cooperating with President Biden’s Port Envoy but apparently only if it can rake in millions more in profits paid for by American importers.
PierPass was initially designed to encourage a broader distribution of truck traffic to reduce congestion and mitigate truck emissions. The Traffic Mitigation Fee (or TMF) was put in place to help the terminal operating members of WCMTOA pay for the cost of keeping gates open during off-peak hours and create an incentive to use those hours. However, as the years have passed, the connection between PierPass and those goals has become increasingly elusive. Before the involvement of the Port Envoy, PierPass had given up any semblance of having congestion-related pricing to help incentivize better traffic flow. Today, it collects a Traffic Mitigation Fee that mitigates no traffic. Purportedly, it pays for WCMTOA’s members to provide off-peak gate options. However, PierPass’ operations are so opaque that it is unclear to me that it provides any public benefit that would justify its antitrust exemption.
Due to these concerns, I have asked for a full Commission meeting as soon as practicable to consider potential FMC investigations or actions concerning the WCMTOA amendment as well as the underlying agreement. In the meantime, WCMTOA’s amendment and request for expedited review remain under FMC consideration.
The current congestion at the Ports of Los Angeles and Long Beach remains a threat to the Nation’s economic vitality and a serious problem for thousands of importers and exporters. It can only be solved through positive collective action, and many stakeholders at the Nation’s biggest port complex have made contributions, sometimes being willing to sacrifice for the greater good. PierPass seems to be an exception. I know of no change or idea that PierPass has ever offered to help ease COVID-related congestion and, to be fair, it’s possible PierPass simply is not in a position to help much. However, far from contemplating a sacrifice, this amendment seems to be an attempt to profit from a national crisis. I urge the WCMTOA parties to consider more public-spirited actions.
Daniel B. Maffei is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.