Top US West Coast ports have received significant funding totaling over US$170 million from the Harbor Maintenance Tax Fund (HMTF) this year. Administered by the US Army Corps of Engineers and financed through a 0.125% tax on importers’ cargo values, the HMTF is designated for financing maintenance projects on US navigable waterways.
Despite historically receiving minimal federal investment, certain US deep-water ports have benefited substantially from the HMTF revenue. Ports like Los Angeles and Long Beach, which contribute approximately half of the fund’s revenue, historically saw modest returns due to their naturally deep harbors. For instance, the Port of Los Angeles received only 3% of its contributions in recent years.
In 2020, amendments to the America’s Water Infrastructure Act of 2018 expanded the permissible uses of the funds to include wharf repairs and other waterfront maintenance projects.
Looking ahead, appropriations for fiscal years 2024 through 2029 will be determined by the funds deposited into the HMTF two years prior, supplemented by up to an additional US$2 billion annually.
For 2024, the ports of Long Beach and Los Angeles have secured a combined US$112 million for waterfront maintenance and repair, with Los Angeles receiving US$58 million and Long Beach receiving US$54 million. This marks a significant increase for Los Angeles, which received only US$6 million in 2023.
Gene Seroka, Executive Director of the Port of Los Angeles, commented, “Now we have a more equitable distribution of funds and an allocation strategy that extends beyond maintenance dredging to include projects like seismic safety upgrades and wharf repairs, allowing ports like Los Angeles greater access to these funds. The goal is to utilize the accumulated surplus and align future spending with annual revenue.”
Oakland expects to receive approximately US$40 million from the HMTF, while the Northwest Seaport Alliance (NWSA), representing Seattle and Tacoma, anticipates a substantial injection of US$40 million as well.
Discussing the funding at a recent Board meeting, Managing Members of the NWSA highlighted that the HMTF allocation will alleviate the operational revenues typically earmarked for maintenance, freeing them for other activities.
Taking advantage of this financial flexibility, the NWSA has introduced two new incentive schemes effective from May 2024 to April 2025: the Voyage Consistency & On-Time Arrival Award Programme and the Gate Operation Incentive. These initiatives shift focus from volume-based incentives to enhancing service levels, making the ports more appealing to cargo owners.
Under the Voyage Consistency & On-Time Arrival Award Programme, a US$1 million prize pool is established for carriers meeting service level KPIs. Meanwhile, the Gate Operation Incentive allocates US$2 million to terminal operators to cover labor costs for extending gate hours.
With a total budget of US$11 million for incentive schemes, including its International Container Rail Cargo incentive programme, the NWSA aims to bolster service quality and operational efficiency.
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