FMC Must Consider Impact of Local Port Fees on Cargo Diversion, Dye Says

The Federal Maritime Commission "should produce a thorough, transparent, and credible evaluation of relevant information available to us" about whether the Harbor Maintenance Tax is diverting U.S. cargo through Canadian and Mexican ports, said FMC Commissioner Rebecca Dye, speaking at the Canadian American Business Council June 7. The evaluation was requested last year by members of the Washington State congressional delegation (see ITT's Online Archives 11110364).

The FMC received more than 80 comments in response to the inquiry, Dye said.

"We must quantify the amount of U.S. containerized cargo" that's actually imported via Canadian ports as a share of total cargo destined for the U.S., Dye said. She said several of the comments submitted, including from the government of Canada, estimated that U.S. containerized cargo imported via Canadian ports amounts to only 2.5% of total U.S. port traffic averages over the past decade (see ITT's Online Archives 12010420).

"I believe that the Commission must also analyze the effect of any state, local, and port policies and fees that may affect the choice of port of entry into the United States." Dye added.

Meanwhile, imports from China for the first quarter of 2012 increased almost 3.5% over the first quarter of 2011, and U.S. exports increased by more than 17%, Dye said. As a result, vessel operators in the transpacific trade report that recent vessel capacity utilization levels have been about 95%. "How the vessel capacity supply will interact with import and export demand this year is uncertain," Dye said.

Referring to an earlier inquiry, Dye said increases in import volumes in early 2010 collided with the previous vessel capacity reductions, causing "serious supply chain disruptions for American importers and exporters." She said incremental price increases were imposed by carriers, and exporters experienced severe problems with the availability of shipping containers. The FMC inquiry concluded that the most effective long-term solution to the commercial problems experienced by U.S. exporters and importers would be developed, not by the government, but by ocean carriers working closely with their customers to clarify their commercial relationships. Leading the investigation, Dye said she "focused on the need to increase overall reliability of the U.S. international supply chain for U.S. importers and exporters."