Canadian ports still a threat to US cargo: Federal Maritime Commission

Federal Maritime Commission's (FMC) inquiry over whether Canada had unfairly attracted cargo from US ports, because it imposed no equivalent taxes, found the Canadians blameless while at the same time, saying their port operators still posed a threat to US cargo.

"The commission study has found no legal or regulatory impediment to the use of ocean carriers of Canadian or Mexican ports for US cargo shipments," said FMC chairman Richard Lidinsky.

"We identified a situation in the Pacific Northwest, even reaching southward into California, whereby cargo movement through certain parts of our border are putting these ports at a strong competitive disadvantage," said Mr Lidinsky.
The FMC plans to present a list of options to assist the US Congress to remedy the disadvantage, one being the abolition of the Harbour Maintenance Tax.

Of 76 responses to the inquiry, 38 said Canada's Prince Rupert port's lower costs were a reason they used it, with 11 respondents citing the tax as the key factor in opting for Prince Rupert as a gateway to US markets. But 13 respondents said the tax was not a factor and that Prince Rupert was faster and better.

"A lot of factors go into the routing of cargo and a lot of shippers /carriers want diversity in how they get cargo to warehouses is always an issue, and the HMT clearly disadvantages us against Canadian ports," said Port of Seattle CEO Tay Yoshitani.

Said the study: "It is clear that the tax is one of many factors affecting the increased use of foreign ports for cargo bound for US inland destinations. While a user fee is necessary for US ports to grow, the number of proposals suggest an amendment in the current tax should be given consideration."

Separately, Robin Silvester, CEO of the Canadian Port of Vancouver, has said that more than 95% of imports through his port are Canada bound and while the proportions are more weighted to the US at Prince Rupert 200 miles north, though the volumes are much smaller.