Would Protect Competitiveness of Region’s Port, Local Jobs
TRENTON – A bill sponsored by Senator Bob Gordon and Senator Nicholas P. Scutari to halt shipping fees charged by the Port Authority of New York and New Jersey to protect the competitiveness of the region’s port – and the hundreds of thousands of local jobs it supports – was approved today by the full Assembly. It now heads to the desk of the Governor.
“The Port of New York and New Jersey supports commerce, jobs and promotes economic activity in our state. We have to make sure we are protecting its long-term viability,” said Senator Gordon, D-Bergen and Passaic. “By imposing a tax on ocean carriers, the authority has driven up the cost of doing business locally and driven freight to other ports along the East Coast. This threatens the future success of the port and the hundreds of thousands of local jobs that people in our region depend on. 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. The senators 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.
“We will have the opportunity in the coming years to compete with ports across the country for business that will result from the Panama Canal widening project,” said Senator Scutari. “We have to ensure that we are not putting our state at a disadvantage by imposing fees on cargo that are not assessed on carriers at other ports. Abolishing the fees will protect the competitiveness of the Port of New York and New Jersey and the hundreds of thousands of local jobs that it supports.”
The Senate approved the bill by a vote of 37-0; the Assembly approved it 79-0. The bill would take effect immediately but would remain inoperative until similar legislation is enacted by the State of New York.