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LA ties volume rebates to data sharing

The port is making tariff rebates worth up to US$2M per shipping line conditional on carriers sharing data with GE Transportation’s new Port Optimizer portal.

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The Los Angeles harbour commission has agreed to an incentive scheme that give carriers $10 per TEU for every extra TEU they put through the port over a baseline figure, plus the average growth rate of the Trans Pacific trade. Payments are capped at US$2M per carrier in a fiscal year.

In a significant change, the tariff incentive is conditional on carriers sharing nine data elements with the Port Optimizer portal being developed by the Port of Los Angeles and GE Transportation (GET) by 30 September, though this can be extended by the Executive Director if there are technical integration issues.

Advent Intermodal Solutions, which owns the eModal portal, is pushing the port to make any data carriers share with GET available to other companies. Its main concern, CEO Parvez Mansuri said in a letter to the Los Angeles Harbour Commission, is that paying carriers to share data with GET “could effectively create a data monopoly within the port.”

At the moment carriers share data with eModal at no charge, and eModal users pay fees for its port community service products, including managing payment of port fees and shipping line charges such as demurrage. Advent is deeply concerned that GET will pressure lines not to share data with eModal and other companies, in order to drive more customers to use the Port Optimizer portal.

Exactly what fees GET might charge and for what services is still unknown, but Mansuri was clear that he expects the Port Optimizer will take business from eModal. “As a long-time participant in the logistical data business and a stakeholder in the future success of the Port’s efforts to attract cargo volume, we are deeply disappointed by the POLA staffs’ support for our competitor and we anticipate that our business will be harmed if the proposal is adopted,” he said.

The LA Harbour Commission, however, did not agree to Advent’s request that the port amended its tariff proposal to make any data provided to GET available to other stakeholders. Commissioner David Arian said eModal needed to be given the chance to “work this thing out”, but Port Executive Director Gene Seroka strongly denied the suggestion LA is granting GET some sort of data monopoly.

Seroka said that GET went through a public process to select eight other companies to be technology providers to the Port Optimizer. He had hoped this would include Advent: “It was my plan all along that Advent would be joining us and GE on this project, and for whatever reasons at this juncture they have decided not to,” Seroka said.

A meeting with Advent and the port is scheduled for this week, and Seroka was optimistic Advent would come onboard. Jennifer Schopfer, Vice President GET said it wants the companies to work together, “it’s our hope that we can actually get some of this data from companies like eModal and other tech providers for the benefit of the community to drive efficiency and collaboration,” she said.

The public discussion has been presented in terms of how collaboration and sharing can benefit the port and the supply chain, but this glosses over the fact that Advent and GET are competitors. Working with GET would detract from eModal’s own business, and eModal has never had the benefit of the port giving carriers financial incentives to work with it.

For the Port of LA, however, leveraging data is the key to tackling congestion, which is vital to its battle to stay competitive and stem the flow of cargo to other ports. “The ability to drive cargo is singular in my mind,” stressed Seroka. "Since the unfortunate labour lockout of 2002 the ports of LA and Long Beach have lost 20% of their market share, we want that back to support all of our jobs and the industries around this port complex. We need to be on the assertive end of this particular issue to make sure we find ways that incentivize cargo to come to this area, knowing that we have a number of hurdles all across, whether it be cost, our high level of environmental standards, and the competitiveness of other ports in this nation, to the north and south of us,” said Seroka.

Commissioner Edward Renwick said he supported Advent’s push for transparency, “but the fact of the matter is that the Port of LA and the Port of Long Beach are in a dog fight and we have been losing over the course of time through no fault of our own.” Noting that the Port Optimizer has the potential to help LA address some of its big issues like congestion, air quality and links with the inland empire, and speaking to Advent he said, “it’s just crazy for us not to go forward an push full steam ahead, and I strongly encourage you and your company to get involved and jump on the band wagon now.”

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