Commissioners at the Port of Long Beach and Port of Los Angeles are considering whether they are paying too much for PortCheck to collect their clean truck fee. Income from the fee is dwindling - more than 90 percent of the trucks regularly calling at the ports are clean- and the ports want the administrative costs to drop as well. PortCheck is the non-profit entity formed by the marine terminal operators to collect the fee on the ports' behalf.

Port of L.A. commissioners opted last week to hold off on renewing the PortCheck contract in favor of further negotiations to lower the costs. The proposed renewal already reflected some savings, but L.A. commissioners said that the reductions don't go far enough.

From the time it took effect in February 2009 through the end of March 2010, the $35 per-TEU fee levied on all trucks that don't meet 2007 emissions standards has generated $47.9 million for the Port of Los Angeles. Long Beach has collected $38.4 million from the beginning through April 25. The money helps the ports pay for their clean truck subsidy programs.

Through the end of February 2010, the two ports have paid nearly $11.5 million in program development and administrative fees.

Moving forward, revenues are expected to range between $1 million and $1.5 million per month for the rest of the calendar year. The proposed contract renewal calls for the two ports to pay PortCheck $400,000 per month to administer the program, which is between 26 percent and 40 percent of the expected revenues.

For now, the ports are still in the black after PortCheck is paid its fee, but beyond the end of this year, collecting the fee could cost more than it generates.

"If we get to that point, we've got to get out," said Chris Cannon, who heads the Clean Truck Program for the Port of L.A.

Factors likely to affect the equation include more clean trucks due to enter the drayage fleet in the near term and the relatively short time - about 18 months - during which the fee will continue to be collected. On Jan. 1, 2012, the fee disappears because virtually all trucks calling at the two ports will then be required to meet the 2007-or-better emissions standards.

The ports will work to come up with more favorable terms with PortCheck, but if that doesn't work out, they may have to come up with their own system. That would involve some structural changes because the ports don't interact directly with the beneficial cargo owners who now pay the fee, Cannon said.

Bruce Wargo, who oversees the PortCheck operation, said his folks have been meeting with both ports to review the cost structure. He said the process is "a natural outgrowth of any business" that has a changing revenue stream.

The matter is expected to return to L.A. harbor commissioners within the next 60 days. A similar contract renewal has yet to be presented to the Port of Long Beach.

--The Cunningham Report