Added fees sought from rail lines for Alameda project.

The Alameda Corridor Transportation Authority, which has fallen short of reaching its traffic goals since opening in April 2002, is trying to get additional fees from railroads on shipments arriving from overseas - even those that don't use the dedicated rail corridor.

Union Pacific Corp. and Burlington Northern Santa Fe Corp. oppose the authority's efforts to levy a $30-per-container fee on shipments that leave the ports by track and get broken up into smaller pieces at off-site locations. The cargo then enters the rail system at distribution centers in the Inland Empire and east of downtown L.A.

These shipments are reclassified as domestic hauls as soon as they get broken up, or trans-loaded, but ACTA wants them to remain classified as international hauls, making them subject to the $30per-container fee it negotiated with railroads before the $2.4 billion, 20-mile rail line was built.

"In our minds, the cargo that gets trans-loaded but leaves the state--if it came from overseas--it is international cargo," said John Doherty, chief executive of ACTA. "The goods wouldn't be there if they hadn't come from overseas."

Railroads already pay the fee on cargo that moves by truck from the ports to downtown Los Angeles train yards for distribution to parts east. This cargo remains classified as international.

But many retailers have chosen to bring their imported goods to regional warehouses in Riverside and San Bernardino counties by truck. As a result, the corridor, which runs from the ports to downtown L.A., is underused.

The debate centers on when shippers terminate the bill of lading, the documents used to dictate where and when the cargo moves and whether it is an international or domestic haul.

The current trend by shippers is to terminate the bill once the goods arrive at the ports of Los Angeles and Long Beach, thereby labeling the follow-up moves to distribution sites as domestic loads.

Market share

The dispute comes as the corridor authority is trying to increase its share of cargo to and from the ports to its original goal of 50 percent, from the current rate of 36 percent.

Although Doherty said he is cautiously optimistic a resolution can be reached, he said a refusal by the railroad lines to pay additional fees would likely result in a court battle.

Alameda Corridor officials originally broached the subject to railroad company executives last fall and began negotiations in earnest this spring, though there has been no success in achieving an agreement thus far.

"We can't force them," said Doherty. "We would have to pursue a legal resolution."

Burlington Northern officials said the railroads are already paying all the fees they are obligated to under their contracts with the authority.

They said they are willing to discuss the matter with the agency but gave no indication they would open their wallets any wider.

"The language of the contract is clear," said Lena Kent, spokeswoman for Burlington Northern. "Fees on trans-loaded containers are not included and were never intended to be."

John Bromley, a spokesman for Union Pacific, would not comment on the dispute.

Approximately 40 percent of all trans-loaded cargo, about 1.2 million TEUs (20-foot equivalent units), leaves by rail for out-of-state destinations annually, while the remainder is reloaded on truck chassis for destinations throughout the state, according to an Alameda Corridor study completed last year.

Generating revenues

If the agency can persuade the railroads to pay the fee, ACTA would generate at least $18 million in additional revenues per year.

The agency currently generates about $60 million from the railroads annually, enough to cover its annual debt service--for now. About 75 percent of the total comes from use of the corridor while the remainder stems from fees paid for non-trans-loaded cargo trucked to rail yards.

ACTA's annual debt service will increase steadily through 2037, when the entire project is scheduled to be paid off.

Although the agency does not expect to reach its goal of hauling 50 percent of the ports' cargo unless it can construct a detour rail from the corridor to the Inland Empire--a project that's five to l0 years away--it has benefited from a steady increase in overall container traffic coming through the ports of Los Angeles and Long Beach.

In 1998, ACTA based its revenue projections on some 12 million TEUs it anticipated the ports would be handling by 2009. The two complexes are poised to surpass that mark this year. "In the foreseeable future, we should continue to reach double-digit growth," said AI Fierstine, business development director for the Port of Los Angeles.