Alameda Corridor Surcharge
On April 12, 2002 the Alameda Corridor commenced operation in Southern California. The $2.4 billion intermodal infrastructure project consolidates three historic rail access routes between the Los Angeles-Long Beach harbor area and intermodal rail yards 20-25 miles inland, east of downtown Los Angeles.
Consolidation of trackage, plus a triple-track bridge over the Los Angeles River and a 10-mile trench for unit trains to move below surface grade, eliminates some 200 previous grade crossings. Transit time between dock and inland rail yards is decreased on average from two hours to under an hour, saving an estimated 15,000 hours per day in truck and vehicular traffic delays while reducing train, truck and auto emissions.
Just under half of the $2.4 billion project cost - $1.165 billion - is covered by revenue bonds which are to be repaid through a user fee which the railroads serving the harbor area have agreed to pay to the regional Alameda Corridor Transportation Authority (ACTA), which administers the project and which issued the bonds.
As of November 24, 2006, railroads pay ACTA a uniform fee of
$40 per loaded 45 container, $36 per loaded 40' container (FEU) and $18 per loaded $20 container (TEU), with reduced fees for empty containers and non-waterborne domestic containers moving between the harbor and inland rail ramps. In turn, the railroads are passing these charges on to their shipper and carrier customers, including ocean carriers.
Since April 15, 2002, TSA lines have implemented a pass-through of Alameda Corridor charges to their shipper accounts at the same, revenue-neutral levels as those charged to them by the railroads.
Frequently Asked Questions
Q: Why do shippers have to bear the ultimate cost of the rail charges as a result of these pass-throughs?
A: It is the shippers that are ultimately benefiting from the services, including intermodal and inland transportation services, being arranged by the ocean carriers. Specifically, shippers receive benefits as a result of the Alameda Corridor, including faster gate clearance and shorter transit times between downtown rail yards and the Los Angeles-Long Beach harbor, and decreased traffic levels in the harbor vicinity, especially during peak commute times.
It would cost each ocean carrier millions of dollars annually to absorb the cost of these rail charges. Thats on top of investments they already make each year in container equipment, terminals and other support infrastructure. It makes better commercial sense to spread the costs across the widest possible base in order to minimize the economic impact.
Q: How can we be sure this isnt an attempt by carriers to raise additional revenue at shippers expense?
A: The charge is uniform and transparent. It can be found in ACTAs use and operating agreements with the railroads, and the railroads have publicly announced the charge being imposed on the ocean carriers. The charge being imposed by the ocean carriers is a pure pass-through.
Q: What if my cargo is trucked from the rail head to the dock and doesnt utilize the Alameda Corridor?
A: The Alameda Corridor surcharge is applied to all rail intermodal moves to and from the Ports of Los Angeles and Long Beach, irrespective of whether rail or truck is used to shuttle the container between the harbor and the inland rail head. Of course, containers moving locally or from inland locations via truck only, with no rail carriage involved, are not subject to the charge.
Q: Why is a separate charge necessary? Why not include the charge in any upcoming rate adjustment, in the interest of simplification?
A: Carriers and shippers both have an interest in seeing this charge broken out from ordinary base rates. Shippers have a right to understand the various components of their total freight charges. Carriers, meanwhile, are under intense pressure in the current market environment to identify, track and manage costs.
In breaking out extraordinary cost elements that are beyond their control, carriers maintain better visibility into their pricing and are freer to negotiate the portion of the total rate that is variable, based on factors such as volume, supply/demand, customer relationships and service features.