On July 15, 2008, California State Senator Alan Lowenthal’s bill to impose a fee on cargo containers passed the California Assembly, on its way to Governor Schwarzenegger’s desk. The vote wasn’t close: 46-23.
The Assembly vote was the result of years of work by Sen. Lowenthal and a wide-ranging coalition of enviro, labor, health and community groups, including NRDC. Assemblyman De La Torre also helped shepherd the bill through the lower house. The bill will provide millions of dollars for projects to clean up the air pollution that is caused by goods movement in California by imposing a $30 per TEU (twenty-foot equivalent unit) fee on cargo containers shipped through the Ports of Los Angeles, Long Beach and Oakland.
Predictably, elements of the business community have called the Lowenthal bill a “job killer,” preferring, as usual, to have someone else pay to clean up the pollution that the goods movement industry creates. The California Chamber of Commerce thumbnail opposition is: “Increases the cost of shipping goods and makes California less competitive by imposing an illegal per-container tax in the ports of Long Beach, Los Angeles and Oakland.”
Let’s look at that reasoning. A twenty-foot cargo container can hold about 50,000 pounds of cargo. My laptop weights about 6 pounds and sells for around $1,200. Suppose a cargo container comes into Oakland with 8,000 of these laptops in it. The increased price per laptop under the Lowenthal bill would be less than half a cent. For my nearly weightless sneakers, even less. For a heavy, big-screen DLP television weighing 70 pounds, the increase would be less than 5 cents – well worth it to see the Dodgers beat the Giants on the big screen. So, yes, the cost of goods would increase, but I think we can handle a 5 cent increase on a $1,300 TV.
As to reducing California ports’ competitiveness – competitiveness with respect to whom? The already high-cost ports of LA and Long Beach handle around 40 percent of the nation’s imports now – and for a good reason: they allow for the shortest shipping routes from Asia to the U.S. and have an unparalleled infrastructure already in place to send cargo all over the country. Where else will ship traffic go over $30 per TEU? Given very high prices for fuel, the cost of shipping goods through the Suez Canal to the East Coast or, in a few years, through the expanded Panama Canal to the Gulf Coast, will be hugely higher by comparison. So, the “competitiveness” claim is phony also.
Last, but not least (hey, I’m a lawyer) is the illegality claim. We’ve seen these same arguments trotted out over and over by elements of industry who don’t want to pay to clean up their own mess – a mess that they continue to profit from. Bottom line, the tidelands on which the three California ports covered by the bill sit are property of the State, and so the State can regulate its property’s uses without coming into conflict with the federal Constitution.
The real question about legality is whether the big-box retailers will sue California to block a bill that is designed to protect the health of their customers, California residents. It would be foolish for them to do this. We’ll soon see if they will.