The Los Angeles Board of Harbor Commissioners has approved an incentive program to reward shipping lines that bring new container business through the Port of Los Angeles in 2014.
Under the incentive program, an ocean carrier will earn $5 per TEU for each incremental container it ships through
the port in calendar year 2014. The rate jumps to $15 per TEU for all
TEUs if a carrier’s container volume grows by 100,000 or more units during the year.
The port said the program comes "at a time when the fundamentals of shipping are changing and international carriers are rethinking traditional business practices."
The baseline for measuring the increased volume will be the total
number of containers each carrier moved through the port in 2013. Carriers will receive their incentive in a lump-sum payment
in early 2015. Port staff will monitor the program on a monthly basis to
evaluate its effectiveness and consider whether or not to recommend its extension
In the first nine months of this year, the Port of Los Angeles handled 5.85 million containers, 5.5 percent fewer than in the same 2012 period, while the neighboring Port of Long Beach has seen volumes increase 13.7 percent to just over 5 million TEU.
Separately, the board also established a two-member ad hoc committee on Port Industrial and Economic Development dedicated to identifying and advancing the best economic practices for maintaining the port’s top position. Vice President David Arian and Commissioner Patricia Castellanos will serve on the committee.
The port said, "While transpacific trade is projected to grow, international shipping is undergoing sweeping change. With larger vessels and increased global shipping capacity, carriers are revisiting the traditional business model of calling at a dedicated marine terminal."
Geraldine Knatz, executive director of the port, carriers are making adjustments in the challenging ocean environment. “Carriers are rethinking their routes and relationships to be as competitive as possible,” she said. “This incentive gives them another reason to strengthen their ties with the Port of Los Angeles.”