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Tariff hike advances at Port of New Orleans

Lance Traweek, Editor//October 23, 2019//

Tariff hike advances at Port of New Orleans

Lance Traweek, Editor//October 23, 2019//

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The Port of New Orleans plans to raise most of its tariff rates on container and breakbulk cargo by 2 percent in 2020 and is eyeing larger increases and new tariffs on other services.

Photo by Lance Traweek
Photo by Lance Traweek

The 2 percent increase applies to tariffs — a tax a company pays the port to dock — on activities like wharf obstructions, wharf cleanings, assignment fees, security deposits, applications for berths, vacating of berths, terminal use fees and harbor fees, among others.

The increase was approved unanimously by the Board of Commissioners’ property and insurance committee on Monday. It will go before the full board at its regular meeting at 1:30 p.m. Thursday at the port’s administrative building at 1350 Port of New Orleans Place.

Jessica Ragusa, port spokesperson, said the increases are part of a “standard, annual review and represent market-rate adjustments.” Ragusa said the increases align the Port of New Orleans with other deepwater Mississippi River ports and other Gulf ports.

Officials have not specified those ports or how the adjustment is calculated. It’s also unclear how much revenue they expect to receive as a result of the increases.

“The most impactful changes are the rate with the 2 percent increase to the majority of the cargo-based rates,” said Jacob Crist, deputy director of terminal operations and real estate at the port. Crist added that it represents a Consumer Price Index (CPI) adjustment that was programmed into the port’s revenue projections.

In addition, the committee approved an 8 percent tariff increase on container crane rates, an hourly rate assessed by the port for the use of its container gantry cranes. Crist said the increase is a reaction to investments and improvements the port is making. He said the increase will bring it closer to the market rate for those pieces of new equipment.

The port is also considering a new tariff charge of $2,500 for fuel bunkering, or the distribution of fuel for use by ships. It applies to non-passenger, ocean-going vessels.

Another new tariff would be imposed on film and event permitting in the form of a penalty for unpermitted activities and untimely filings and payments. Ragusa said the item is being added as a “simple reference point to detail initial deadlines in basic requirements.”

Special dockage rates would also increase to align with 50 percent regular dockage rates. Crist reiterated that the dockage rate provision is to “align with best practices of other Gulf ports.”

Crist said that pending passage of the item on Thursday, a 60-day notice will be sent to terminal operators, shippers, agents and ocean carriers.

Board Commissioner Charles Ponstein, who represents St. Bernard Parish, entertained the motion to approve in the committee meeting. It was seconded by vice chairman Darryl Berger, a representative of Orleans Parish. The item received no opposition from committee or board members.

The increase comes at a time of decreasing sources of revenue for the port. At the end of last year, officials reported a double-digit drop in steel volumes that resulted in significant losses due to steel tariffs imposed on the federal level.

But Ragusa said those tariffs “do not have any type of impact on this annual review process.”

It’s the first tariff increase since 2017, when it got more expensive for cruise vessels to park at the port.

In 2015, the board passed its first tariff increase since 2012. At the time, Matt Gresham, director of external affairs, said the port is “very sensitive to the competitive nature of any fee increase.”

“The port’s tariff is a revenue source, and periodically we increase our fees but only after careful competitive analysis of other ports,” Gresham said in 2015 about the nature of increases.

Gary LaGrange, former port president and CEO, said in 2015 that the port’s users “don’t like (tariff increases),” while Paul Zimmermann, former director of port operations, said then that “these things are never received well.”

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