FMC Asked to Look at Diversion of U.S.-Bound Cargo to Foreign Ports
On August 29, 2011, Senators Cantwell (D-WA) and Murray (D-WA) sent a letter asking the Federal Maritime Commission to conduct an analysis of the impacts and the extent to which the Harbor Maintenance Tax and other factors impact the diversion of U.S. bound cargo from U.S. west coast ports to west coast Canadian and Mexican ports.
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HMT Gives Canadian and Mexican Ports Cost Advantage Over U.S. Ports
The Senators note that shippers can avoid paying the HMT by routing cargo through non-U.S. seaports and the HMT has become a more significant competitiveness issue with the development of new Canadian and Mexican seaports along the west coast.
The letter notes that a growing number of containerized U.S. imports from Asia move through the west coast Canadian container ports of Vancouver and Prince Rupert en route to the U.S. Midwest (i.e., Chicago and Memphis) through cross-border rail. As a result, non-U.S. ports are able to claim a substantial per-container cost advantage over U.S. seaports based on the HMT alone. In addition, the HMT is not collected at the land border, resulting in decreased revenue for the Harbor Maintenance Trust Fund. As a result, U.S. capacity to handle international trade growth is adversely affected.
Senators Request Legislative and Regulatory Recommendations from FMC
In their letter, the Senators also ask the FMC to provide legislative and regulatory recommendations to address their concerns.
Letter available by emailing documents@brokerpower.com.