Containerized exports in Southern California soared in December, increasing 40.2 percent over December 2008 at the Port of Los Angeles and 30.9 percent at the Port of Long Beach.

The nation’s two largest container ports closed out their worst year in decades. Total container volume, including loaded imports and exports and empty containers, was down 14 percent in Los Angeles to 6,748,945 20-foot equivalent units. Long Beach was down 22 percent to 5,067,597 TEUs.

Imports continued to show gradual improvement as they have done each month since late summer. Long Beach reported an increase of 13.4 percent over December 2008. Imports through Los Angeles were 4.4 percent lower than the previous December.

Total container volume increased 8.7 percent compared to December 2008 in Long Beach and 0.35 percent in Los Angeles.

The trend of recent months indicates that the U.S. trade recovery will be led by exports. “The spike in loaded outbound containers was a nice way to put a tough year behind us,” said Geraldine Knatz, executive director of the Port of Los Angeles.

Trade analysts anticipate a gradual recovery in U.S. imports, which out-number containerized exports by a factor of two to one.

- Bill Mongelluzzo, The Journal of Commerce Online.

The Board of Harbor Commissioners of the City of Los Angeles, grantee of Foreign-Trade Zone (FTZ) #202, has submitted an application to the Foreign-Trade Zones Board requesting authority to reorganize and expand its zone in the Los Angeles area within and adjacent to the Los Angeles-Long Beach Customs and Border Protection port of entry. The application was formally filed on December 11, 2009.

FTZ #202 was originally approved on July 14, 1994 (Board Order 693, 59 FR 37464, 7/22/94), and it has been expanded and reorganized since. Details of the proposed changes can be found in the Federal Register notice.

Christopher Kemp of the FTZ Staff has been designated examiner to evaluate and analyze the facts and information presented in the application and case record and report findings and recommendations to the Board.

Comments (original and 3 copies) should be addressed to the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230-0002. They are due by February 16, 2010. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to March 3, 2010.

For further information, contact Christopher Kemp at Christopher.Kemp@trade.gov or (202) 482-0862.

On November 10, U.S. Customs and Border Protection (CBP) announced the launch of a pilot program to automate the arrival/departure form (CBP Form I-94W) for Visa Waiver Program (VWP) travelers from Auckland, New Zealand, to Los Angeles International Airport. The pilot will support the automation of the paper I-94W form for visitors to the United States who travel under the VWP with an approved travel authorization via the Electronic System for Travel Authorization (ESTA).

The pilot program is being tested on Air New Zealand Flight 6, beginning Thursday, November 12 and will last 30 days. Passengers traveling on this flight with an approved ESTA will not need to fill out the paper I-94W form. CBP will evaluate the success of the pilot program and consider expanding the pilot program to additional Air New Zealand flights to Los Angeles during the testing period.

“CBP has received more than 13 million ESTA applications from nationals of VWP countries and compliance continues to grow daily,” said CBP Acting Commissioner Jayson Ahern. “With the Form I-94W Automation Pilot Program, we are facilitating the travel and entry process for our VWP visitors from New Zealand and for VWP travelers arriving from other countries in the near future.”

Air New Zealand, with the support of the government of New Zealand, volunteered to test the process using their flights into Los Angeles. Air New Zealand Flight 6 was selected because it arrives as a stand-alone flight.

Congress required through the Implementing Recommendations of the 9/11 Commission Act of 2007 that DHS develop and implement an automated system to determine, in advance of travel, the eligibility of visitors to travel to the U.S. under the VWP, and whether such travel poses a law enforcement or security risk.

ESTA became mandatory on January 12 for all nationals of VWP countries prior to boarding a carrier to travel by air or sea to the United States under the VWP. VWP travelers need to receive an ESTA approval prior to departing for the United States. This requirement does not affect U.S. citizens returning from overseas or citizens of VWP countries traveling on a valid U.S. visa.

The U.S. VWP currently enables the nationals of 35 countries to travel to the United States for tourism or business for stays up to 90 days without obtaining a visa. VWP travelers currently complete a written I-94W form providing basic biographical, travel, and eligibility information while en route to the United States. VWP travelers now provide this information online prior to departure for the United States with ESTA as well.

ESTA applications may be submitted at any time prior to travel, and once approved, generally will be valid for up to two years or until the applicant’s passport expires, whichever comes first. Authorizations will be valid for multiple entries into the U.S. CBP recommends ESTA applications be submitted as soon as an applicant begins making travel plans.

Effective November 15, only importers and exporters using older, more polluting trucks to move cargo into and out of the port will have to pre-pay fees under the Port of Long Beach’s Clean Trucks Program. Currently, all cargo owners claim and pre-pay the fees, although those using clean trucks or rail are later reimbursed.

Last month, the Long Beach Board of Harbor Commissioners approved the change in response to industry requests. Cargo owners said the requirement had resulted in extra costs and onerous administrative burdens.

Shortly after the decision by the Port of Long Beach to change the pre-payment requirements, neighboring Port of Los Angeles likewise eliminted pre-payment fees under its own program. The two ports manage their truck programs separately.

The Port of Long Beach’s new rule was to take effect on November 1, 2009, but to coordinate with the Port of Los Angeles, the new effective date has been postponed by 2 weeks to November 15.

Under the new rules, pre-payment will be required only from cargo owners who use older, more polluting trucks. Trucks that meet strict 2007 EPA emission guidelines or run on cleaner alternative fuels like Liquid Natural Gas (LNG) are exempt from the fee. Cargo moved by train is also exempt from the Clean Truck Fee.

The port has made available a chart showing which trucks must pay fees and which are exempt.

The Port of Los Angeles will co-host an international trade workshop for small business owners from 2:30 p.m. to 5 p.m. on Thursday, Oct. 29, at the Doubletree Hotel, 2800 Via Cabrillo Marina in San Pedro. The workshop will be conducted in partnership with Mayor of Los Angeles Antonio Villaraigosa’s Office of International Trade Services, the Port of Los Angeles, Los Angeles World Airports, City of Los Angeles WorkSource Centers, the Alameda Corridor Jobs Coalition, the Africa-USA International Chamber of Commerce, and 15th District Councilwoman Janice Hahn.

Councilwoman Hahn will introduce the session. Attendees will learn how to expand market reach, finance and insure overseas sales, and use the export services of the Port of Los Angeles and Los Angeles World Airports. A question-and-answer session and networking time are also scheduled.

Supporting and participating organizations include the Center for International Trade Development, the Los Angeles Community Development Department, the Export-Import Bank, the U.S. Los Angeles Air Cargo Association, L.A. Customs Brokers & Freight Forwarders Association, LAWA’s Business & Job Resources Center, U.S. Small Business Administration, the U.S. Department of Commerce, Harbor City/Gateway Chamber of Commerce, the San Pedro Peninsula Chamber of Commerce, the Wilmington Chamber of Commerce and the Los Angeles Minority Business Opportunities Center.

Registration is limited and reservations are required; they can be obtained by e-mailing bjrdrsvp@lawa.org. For additional information, contact Maria Alva at (310) 732-3841.

In an effort to eliminate fees, the Port of Los Angeles, along with the Port of Long Beach, is working with its terminal operators to implement a plan to eliminate the claiming process for cargo carried by clean trucks.

The change, which would take effect later this year, would require cargo claiming and pre-payment only from cargo owners who are still using trucks that do not meet 2007 emission standards.

In August 2009, more than 66% of cargo moves at Port of Los Angeles terminals were made by trucks that met 2007 emission standards. Cargo owners that use 2007 emissions-compliant trucks will no longer have to claim and pre-pay the Clean Truck Fee, which will simplify the administrative process, saving both time and money.

“This tentative agreement is the result of both the Ports of Los Angeles and Long Beach listening to and working with the large percentage of cargo owners who are adhering to the Clean Truck Program,” said Dr. Geraldine Knatz, Executive Director of the Port of Los Angeles. “It eliminates a bureaucratic step without slowing down the significant progress we’ve made cleaning the air with this program.”

The Port of Los Angeles, along with the Port of Long Beach, recently met with the West Coast Marine Terminal Operators Association and came to a tentative agreement to eliminate the claiming and pre-payment requirement for importers and exporters adhering to the Clean Truck Program. Terminal operators need to reprogram computer systems before the changes can take effect.

The total number of containers shipped through the Port of Los Angeles in August increased compared to July, the second consecutive month that volumes have risen at the Port amid a slumping economy.

The total number of TEUs imported and exported through the Port of Los Angeles in August was 612,581, a 6% rise compared to 576,203 TEUs in July. In June, total container volume at the port was 551,679 TEUs.

August container volumes, which reflect a muted peak shipping season, are the port’s highest this calendar year. By comparison, August 2008 container volume was 19% higher, mostly due to a peak shipping season that came prior to the economic meltdown that hit in September 2008. Year to date in 2009, total TEU volume is at 4,374,818, 18.3% lower compared to the same 8-month period in 2008.

A long-term forecast prepared by the Tioga Group for the Port of Los Angeles earlier this year indicates that the recession and its effect on international container trade are expected to level out in late 2009, with modest growth returning in 2010.

Maersk Line has announced that the APM Terminals Pier 400 facility at the Port of Los Angeles in California will be offering on-dock rail services. The carrier said the addition of on-dock rail services will create more reliable connections and increase the speed with which cargo moves to its destination.

Details of the new on-dock rail services are as follow:

• Effective August 19, 2009, all U.S. trans-Pacific export cargo (United States to the Far East) from New Orleans, San Antonio, El Paso,  and Dallas will be routed directly into Pier 400.
• Effective August 24, 2009, all U.S. trans-Pacific import cargo to New Orleans, San Antonio, El Paso,  and Dallas will be routed directly from Pier 400.

Eliminating the need to truck the cargo from terminal to rail hub and vice versa is expected to reduce the risk of delays. The service upgrade is also more environmentally friendly and should help to curb CO₂ emissions.

Marine terminal operators at the Ports of Los Angeles and Long Beach announced August 3, 2009, that they will maintain the current Traffic Mitigation Fee (TMF) of $50 per TEU despite notable losses associated with the OffPeak program.

The program, established in 2005 to reduce congestion and air pollution in and around the two ports, established five new shifts per week (Monday through Thursday from 6 p.m. to 3 a.m. and Saturday from 8 a.m. to 6 p.m.) at all international container terminals. As an incentive to use the new OffPeak shifts and to cover the added cost of the shifts, a Traffic Mitigation Fee (TMF) is required for most cargo movement during peak hours (Monday through Friday, 3 a.m. to 6 p.m.).

Members of the goods movement industry indicated that lower cargo volume has affected their business and that raising the TMF to cover higher labor costs and other ancillary expenses would create additional financial challenges. Given the current economic climate and significant drop in cargo volumes, marine terminal operators have taken significant action to cut costs. Those cost-cutting measures have maintained the viability of the OffPeak program and helped preserve the current TMF.

Revenue from the TMF has decreased due to lower cargo container volume at the two ports. In March, terminal operators announced they would eliminate one OffPeak shift per week. The new schedule went into effect April 6.

Bill Mongelluzzo
The Journal of Commerce Online - News Story

Best performance so far signals peak to be much lower than last year

Container volume at the Port of Los Angeles declined 16.3 percent in May compared to May 2008, which was about par with the port’s performance since January.

However, like neighboring Long Beach, Los Angeles in May recorded its best performance so far this year in containerized imports. That indicates container volumes are beginning to build toward the normal seasonal high that should be recorded in the September-October period.

Containerized imports in May were down 18 percent from May 2008. Exports were off only 7 percent in Los Angeles, the nation’s busiest container port.

Imports have increased steadily each month from 206,034 TEUs in February to 304,109 TEUs in May, according to statistics posted Monday on the Port of Los Angeles Web site.

Loaded export containers have also increased steadily each month, from 111,595 in February to 152,471 in May.

Retailers this year are being extremely cautious in rebuilding their inventory levels, which accounts for the double-digit drop in imports compared to the same period last year.

With less than one month left to place orders with factories in Asia for Christmas merchandise, it appears that imports by the nation’s retailers during the fall peak shipping season will be much lower than they were last year.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com.