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FMC examines PierPass and Hanjin debacle at recent meeting

As reported in LM, Hanjin was forced into receivership in late August By Patrick Burnson

The Federal Maritime Commission (FMC) recently discussed two matters of interest to each of the five Commissioners and the broader shipping public: ongoing developments related to the Hanjin Shipping bankruptcy, and a third party review of the southern California-based PierPass program.

“It was particularly instructive to receive the briefing on PierPass,” says FMC Chairman, Mario Cordero.

He adds that “it remains to be seen” if the current third party examination of PierPass’ operations will provide the transparency and accountability that its customers demand and the FMC is seeking.

“I hope that this work product will be an exercise in real disclosure, such a meaningful overture would go a long way toward repairing relations with customers and easing mounting concerns at the Commission about the way PierPass does business,” says Cordero.

As reported in LM, Hanjin was forced into receivership in late August. Its cessation of operations has made an impact on U.S.-based terminal operators, beneficial cargo owners (BCO’s), truckers, and many others in the supply chain.

The FMC is monitoring developments related to this matter carefully and on a continuous basis, state spokesmen.

The U.S. Bankruptcy Court for the District of New Jersey is overseeing how Hanjin Shipping unwinds their operations domestically.

PierPass, established in 2005, is a program that creates off-peak gate hours at cargo handling facilities located at the Ports of Los Angeles and Long Beach. Cargo moved off of a marine terminal during daylight hours requires payment of a Traffic Mitigation Fee surcharge that helps finance night operations at those same facilities. Containers that move at night do not require payment of a Traffic Mitigation Fee.

PierPass was formed, and operates, under authority of the West Coast Marine Terminal Operators Agreement (WCMTOA). This agreement is on file at the Federal Maritime Commission and as such, PierPass comes under the agency’s regulatory and enforcement jurisdiction.

The volume and tenor of complaints about PierPass reaching the Commission from truckers, beneficial cargo owners, and other leading supply chain executives have increased steadily and dramatically over the past two years.

A common criticism of PierPass centers on the increased cost of the program and the service that is offered is neither dependable, nor does it improve with annual fee increases.

Recently, PierPass engaged an outside consulting group to provide an analysis of aspects of its operations.

Commission staff traveled to Long Beach recently to meet with PierPass executives to learn more about the examination being undertaken.

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About the author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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