In a temporary win for importers and exporters, a California legislator has pulled his bill proposing a $30 per container fee for shippers and importers moving goods through California ports. The move came after Sen. Alan Lowenthal, D-Long Beach, met with Governor Arnold Schwarzenegger, who said he would veto the bill again, as he had done in 2006. However, the Governator has in general now blessed the idea, if it is tweaked in some aspects in the face of strong opposition by major importers and exporters.

The $30 fee per TEU (twenty-foot equivalent unit) proposed in the bill for containers moving through the ports of Long Beach, Los Angeles or Oakland was expected to raise some $500 million annually – money that would have been targeted at investment in California port and highway infrastructure, which is under stress.

However, it was strongly opposed by major importers, such as Wal-Mart, Target and Home Depot, ocean carriers, and exporters such as the farm lobby, a huge force in California. They, and others, have argued in part that the fee would cause accelerated diversion from California to ports in Seattle, Tacoma, Houston and elsewhere.

The Waterfront Coalition, a lobbying group created by major retailers, has called the proposed fee an "illegal tax" and indicated it would try to challenge the fees in the courts if they become law. Under what grounds the law could be challenged is unclear.

Despite Schwarzenegger’s veto last year, and promise of one now, it appears that in general he is in favor of some type of new container surcharge.

"I look forward to working during the fall recess ... to craft a solution that will protect California's air quality and also facilitate the goods movement through California," he said. Many believe that statement and what has been disclosed in private discussions mean he will support a fee of some kind, perhaps at a slightly lower level, or packaged with improvements to speed container flow through the ports.

Regardless, California, as with most states, will need to find funding somewhere to support needed logistics infrastructure improvements, and like it or not, shippers and importers will almost certainly be asked to carry some of the financial load. The real question will be if the fee is high enough to actually cause port diversion strategies.