The Los Angeles Board of Harbor Commissioners today approved a new incentive program to reward shipping lines that bring new container business to the Port of Los Angeles in 2014.
Under the incentive program, a carrier will earn $5 per 20-foot equivalent unit (TEU) for each additional container it ships through the port in 2014 over its volumes this year. The rate jumps to $15 per TEU for all TEUs if a carrier's container volume grows by 100,000 or more units for the same 12-month period.
Carriers will receive their payments in a lump-sum form in early 2015, the port said. Port staff will monitor the program each month to evaluate its effectiveness and to determine if it should be extended beyond the first year. Los Angeles is the nation's busiest seaport.
The port's action is an unusual step to attract more business as ocean-shipping patterns change. Those changes include the advent of mega-containerships, which will call on fewer ports per voyage, and the expected late-2015 opening of the expanded Panama Canal. Some believe the expansion will divert some traffic away from the Port of Los Angeles and through the Canal instead.
"Carriers are rethinking their routes and relationships to be as competitive as possible," said Geraldine Knatz, the port's executive director, in a statement. "This incentive gives them another reason to strengthen their ties with the Port of Los Angeles."
Phillip Sanfield, a port spokesman, said he was unaware of any other U.S. port with a similar program.
Separately, the Board also established a two-member ad hoc committee on Port Industrial and Economic Development aimed at identifying and advancing the best economic practices for maintaining the Port's top position. Vice President David Arian and Commissioner Patricia Castellanos will serve on the committee.