Pacific Maritime Association

Cost Differentials are Significant The sustained market share losses of discretionary cargo have also become a rallying call for West Coast ports, with intense focus on strategies for winning back the business that is so vital to hundreds of thousands of local workers whose livelihoods depend on healthy West Coast ports. Our ports lead the nation in world-class infrastructure – deep water ports, rail connectivity and overall capacity for containerized and break bulk cargo. Yet the costs of doing business along the West Coast continue to increase at a more accelerated pace than the competition. Current container charges at the Ports of Los Angeles and Long Beach, for example, are 74% to 165% higher than competing ports. Such cost differentials are due to environmental fees and regulations, cost of land, infrastructure fees and more. In addition to charges at the ports, costs to move cargo from Seattle or Tacoma to Chicago can be as much as $400-$600 more per container than shipping through Vancouver due in large part to the difference in intermodal rates charged by the Canadian railroads, according to the Journal of Commerce. And while California ports are setting a new standard for environmental sustainability, these costs are not shared by terminal operators in other parts of the country where ports have yet to adopt similar measures such as zero-emission terminal equipment and electrification requirements for docked vessels. Strategies for the Future Going forward, these significant cost differentials must be confronted not just by PMA and its member companies, but by the port authorities, supply chain, and regulators who are partners in helping West Coast ports compete. Strategies to reduce per container costs must be aggressively studied. Employing a national environmental standard for port terminals should be evaluated. Engagement with the rail lines to improve competitiveness with the East, Gulf Coast and Canadian ports is also important. Further, it is vital to educate the many industry sectors who rely on West Coast ports to become part of the conversation. This includes truckers, logistics professionals, real estate leaders involved in warehousing, retailers, manufacturers, agricultural interests and many more whose livelihoods depend on healthy, strong and reliable West Coast ports. We welcome the participation of the ILWU in this effort. West Coast ports are still #1 in North America, and we benefit from a range of natural, built-in advantages over our competitors. We have the opportunity to regain lost market share and grow our business. The stakes are high. Hundreds of thousands of workers in West Coast cities rely on healthy ports, and our local economies depend on these ports to fuel economic growth. We can tackle these tough issues together. 0 $100 $200 $300 $400 $500 LA/LB Eastern Canada Gulf South Atlantic North Atlantic 2019 Container Charges Source: Sustaining the San Pedro Bay Community Ports of Los Angeles & Long Beach, Nacht, Henry & Martin, 2019 2019 | THE YEAR IN REVIEW Terminal operations at the Port of Los Angeles. 15 15 PACIFIC MARITIME ASSOCIATION

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