Issue 24

November, 14th 2008

Clean Trucks Fee in Los Angeles, Long Beach Delayed!

The ports of Los Angeles and Long Beach will not begin collecting a $35-per-TEU clean-truck fee on Monday as previously announced. It is not certain when importers and exporters will have to begin paying the fee.

Collection of the fee, an integral part of the ports” clean-trucks program, is being delayed due to concerns raised by the Federal Maritime Commission about the impact of the program on trucking competition and drayage rates in the harbor. PortCheck, the entity that will process the fees, announced the delay late Thursday.

“An agreement filing relating to the ports” arrangement with PortCheck is still pending with the FMC and the fee collection will be delayed while issues relating to that filing are resolved,” said Bruce Wargo, president of PortCheck.

The FMC, which previously announced its intention to challenge certain provisions of the clean-trucks program in court, is especially concerned about a requirement at the Port of Los Angeles that harbor trucking companies hire drivers as employees. The Teamsters union is pushing that requirement because it will make it easier, and legal, to organize the drivers, most of whom are independent contractors.

Long Beach does not require the use of employee drivers, but the FMC said it is nevertheless concerned about provisions in the Long Beach plan related to assessment of the clean-trucks fee.

The $35-per-TEU fee, to be paid by cargo interests, is crucial to the success of the Los Angeles-Long Beach clean-trucks program, which is designed to reduce truck emissions by 80 percent over the next five years.

Harbor trucking companies must replace some 16,000 trucks with new vehicles that meet the ports” emission standards. Because harbor drayage companies operate on thin margins, the ports agreed to subsidize up to 80 percent of the cost of a new truck, which can be $100,000 for a clean-diesel truck and close to $200,000 for a truck powered by liquefied natural gas.

The ports and marine terminal operators applied to the FMC for antitrust immunity in order to establish PortCheck and to discuss fees. The commission granted the antitrust immunity, but expressed concern about possible anti-competitive aspects of the clean-trucks program concession requirements. To operate in the harbor, trucking companies must obtain a concession from the ports.

“The terminal operators and ports continue to work with the FMC to resolve remaining questions about the program,” Wargo said. “The new start date for fee collection is not yet clear.”

This is the second time the start date for fee collection has been delayed. The ports had intended to begin collecting the fee on Oct. 1, but then pushed the date back to Nov. 17.

Wargo said most of the terminals in the harbor have the hardware and software needed to process trucks as they enter the terminal gates and determine which shipments will be assessed the fee.

According to PortCheck, more than 18,000 importers, exporters, forwarders, customs brokers, cargo consolidators, trucking companies and ocean carriers have registered with PortCheck to claim cargo.

FMI and Summit Logistics International will continue to monitor this situation very closely and advise our customers of any changes as soon as they occur.

"10+2" Plans Due to be Released in November

U.S. Customs and Border Protection plans to publish the intensely debated "10+2" rule in the Federal Register on Nov. 24 pending a positive review by key oversight committees in Congress, according to spokeswoman Jenny Burke.

The White House completed its review of the rule requiring electronic advance information about ocean shipments from importers and carriers, according to an order posted on the federal government's Web site for regulatory developments.

Customs and Border Protection now has authorization from the Office of Management and Budget to issue the final rulemaking for the Importer Security Filing, which will be used to analyze the potential security risk of container shipments that might contain weapons or other material smuggled by terrorists.

The agency subsequently notified the Ways and Means, Transportation and Infrastructure, and Energy and Commerce committees in the House and the Finance and Commerce, Science and Transportation committees in the Senate of its intent to move forward with the rulemaking, Burke said. The letter included a copy of the final draft.

Left out of the formal notification process were the House and Senate Homeland Security Committees.

CBP is waiting for comments from Capitol Hill, and any modifications of the text to address any concerns could push back the rule's tentative release date, Burke acknowledged.

Many sectors of the international trade community are concerned about potential financial and operational burdens created by the "10+2" rule.

American Shipper

Consumer Product Safety Improvement Act

The CPSIA, which became effective on November 12, 2008, requires manufacturers and importers of certain consumer products to certify in writing products covered under the Act conform to the rules, bans, regulations or standards administered by the Consumer Product Safety Commission. The requirements apply to nearly all categories of consumer goods, from fabrics, to furniture, apparel, jewelry, toys, sporting goods, hazardous materials, home appliances, etc.

The Act requires products to be tested and Certificates of Conformity to be issued. The certificate must accompany the shipments of imported merchandise.

If a shipment arrives in port without a Certificate of Conformity, it may be refused admission and destroyed, at the expense of the importer.

Summit Logistics International can assist importers with compliance of this Act through our customs house brokerage division.

For more information regarding whether or not a commodity is covered by the Act and what testing is required, please visit: http://www.cpsc.gov/about/cpsia/cpsia.html#signup