L.A. port introduces incentive program to boost container business

The Los Angeles Board of Harbor Commissioners last week approved a new incentive program aimed at rewarding ocean shippers that bring new container business to the Port of Los Angeles in 2014.

Under the program, an ocean carrier will earn $5 per 20-foot equivalent unit (TEU) for each incremental container it ships through the port in calendar year 2014. The rate increases to $15 per TEU if their container volume grows by 100,000 or more units next year.

The baseline for measuring increased volume will be the total number of containers moved through the port in calendar year 2013. Carriers will receive their incentive as a lump-sum payment in early 2015. Staff will evaluate the program's effectiveness monthly and determine whether to recommend an extension beyond 2014, port officials said in a press release.

The incentive program helps address how shipping fundamentals are changing and international carriers are rethinking traditional business practices, especially with a trend toward larger vessels and increased global shipping capacity, they said.

"Carriers are rethinking their routes and relationships to be as competitive as possible, [and] this incentive gives them another reason to strengthen their ties with the Port of Los Angeles," said Geraldine Knatz, the port's executive director.