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Containerized Cargo Diversion Inquiry Seeks Input by Dec. 22

Monday, November 07, 2011
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission is asking for public comments no later than Dec. 22 on factors that may cause or contribute to the shift of containerized cargo destined for U.S. inland points from U.S. to Canadian and Mexican seaports. The FMC was asked to study this issue and make any necessary legislative and regulatory recommendations by several members of Congress.

The FMC explains that in recent years there has been a steadily observed increase in the amount of U.S.-destined cargo moving through the newly established west coast Canadian port of Prince Rupert and the expanded Mexican port of Lázaro Cárdenas. These same years saw investment in and promotion of Canadian and Mexican port and intermodal rail infrastructure as well as changes to environmental requirements, security considerations and customs inspection procedures. There is concern that the diversion of U.S.-bound cargo through these ports results in lower revenues from the Harbor Maintenance Tax, which is assessed on imports but is not imposed on cargo entering at Canadian or Mexico seaports and ultimately destined for U.S. inland points.

The FMC is soliciting comments and information from all members of the interested public, including public port authorities, private marine terminal operators, ocean common carriers, ocean transportation intermediaries, supply chain experts, providers of rail and trucking services, state, local, provincial or national governments, importers, exporters and beneficial cargo owners, on the following issues.

• any differences in taxes, fees, laws, regulations, cargo handling, customs processes, related terminal/port procedures, infrastructure or intermodal services between U.S. and Canadian or Mexican ports that may come into consideration when determining how to route cargo destined for U.S. inland points

• reasons vessel-operating common carriers serving the U.S., Canada and Mexico may prefer to make Mexican or Canadian ports their first North American ports of call

• why ocean transportation intermediaries or importers may prefer to route their customers' inland U.S.-destined cargo via a Mexican or Canadian port

• the advantages and disadvantages a beneficial cargo owner may face when considering whether to route inland U.S.-destined cargo via a Mexican or Canadian port, including the HMT and total transportation costs (ocean, truck and rail)

• any effect the change in cargo routing has had on employment in the United States

• any volume or other incentives, bonuses or discounts offered by ports, common carriers, terminal operators or other entities for cargo moved through Canadian or Mexican ports and where these may be available to the shipping public

• the advantages and/or disadvantages current transportation services via Canadian or Mexican ports may offer to U.S. exporters

• actions the U.S. government can take to improve the competitiveness of U.S. ports, including those that are the most important or pressing

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