Gordon Bill To Halt Cargo Shipping Fees Imposed By Port Authority Of Ny/Nj Approved By Committee

Would Protect Competitiveness of Region’s Port, Local Jobs

TRENTON – A bill sponsored by Senator Bob Gordon to halt shipping fees charged by the Port Authority of New York and New Jersey and protect the competitiveness of the region’s port – and the hundreds of thousands of local jobs it supports – was approved today by the Senate Transportation Committee.

“The Port of New York and New Jersey is an economic engine for our region, supporting commerce, jobs and economic activity. We have to make sure we are protecting its long-term viability,” said Senator Gordon, D-Bergen and Passaic. “Imposing a fee on ocean carriers was a step in the wrong direction as it places us at a competitive disadvantage, threatening the future success of our port and the hundreds of thousands of local jobs it supports. We should be looking to make the port stronger and more competitive, and repealing this fee will go a long way toward doing that.”

The Port Authority of NY/NJ is the largest port on the East Coast and the third-largest port in the nation supporting 280,000 jobs. In 2011, the Authority became the only port in the United States to impose a cargo facility charge (CFC) on all waterborne cargo, including on empty containers. The fee is $4.95 for 20-foot containers, $9.90 for 40-foot containers, and $1.11 per unit for vehicle cargo. According to a published report, it has cost one shipping line, Maersk, which imports fruit to the U.S. from South Africa, more than $4 million. Shortly after the fee was imposed, a number of carriers, including China Shipping Container Lines, Hanjin Shipping Company and United Arab Shipping Company, filed a complaint with the Federal Maritime Commission, arguing that cargo lines should not be made responsible for investments in rail, roadway and security improvements, to which the fee revenue is dedicated. The case is still in the discovery phase before an administrative law judge.

The bill (S-2747) would prohibit the Port Authority of New York and New Jersey from imposing a cargo facility charge on users, ocean common carriers and marine terminal operators, without a written mutual agreement between that user, ocean common carrier, or marine terminal operator and the Port Authority. The bill would also prohibit the imposition of cargo facility charges on rail carriers. Senator Gordon noted that the legislation is critical to ensure the port’s competitiveness, given the impending widening of the Panama Canal, a project expected to be completed in 2015 that will allow larger, more modern ships to pass through the port.

“The widening of the Panama Canal will create new business opportunities for our region, but will also increase competition among ports along the Eastern seaboard and across the country,” said Senator Gordon. “We cannot afford to put our port at a disadvantage, especially at this critical time. Eliminating the fee imposed on cargo carriers will ensure that we are not harming our business potential, while also protecting local jobs and the local, state and regional economy.”

The committee approved the bill by a vote of 5-0, and now heads to the full Senate for consideration. The bill would take effect immediately but would remain inoperative until similar legislation is enacted by the State of New York.