Hawaii Opposes California Container Tax

Tuesday, March 20, 2007
The California state legislature is considering a new tax on shipping containers that would cost an estimated $34m a year to Hawaii shippers, The Pacific Business Journal reported. More than 80 percent of goods consumed in Hawaii are produced elsewhere and shipped to the islands, and 90 percent of those are shipped through the California ports of Oakland and Long Beach on the ships of Matson Navigation Co., Horizon Lines and Pasha Hawaii Transport. California State Senate Bill 974 would impose a $30 fee per TEU (twenty-foot equivalent unit, the standard measure of maritime shipping capacity) on every cargo container traveling between California and Hawaii.

Most cargo containers are at two TEUs so it amounts to a $60 container fee in most cases. The tax applies whether a container is empty or full. Most Hawaii containers return to the West Coast empty. So for all practical purposes it's actually a $120 fee on every containerload of goods shipped to Hawaii. The California lawmakers who propose the tax say the funds will pay for freight mobility, railroad enhancements, and air emission reduction projects within their state. Source: Pacific Business News

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