THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioner's Value of "Ensuring economic opportunities for Broward's diverse population and businesses" and the Goal to "increase the economic strength and impact of revenue-generating County enterprises balancing economic, environmental, and community needs."
The Board approved Port Everglades Tariff No. 12, Item No. 180, on September 27, 2012 (Item No. 4-PH) that became effective on October 1, 2012 (see Exhibit 1). Tariff Item No. 180 grants authority to the Port Everglades Chief Executive/Port Director to add, delete, waive, and amend items contained in Tariff No. 12 for business, competitive, and emergency purposes. The authority is limited to a maximum of 12 months. Any extension of an action taken under this authority beyond 12 months must be approved by the Board.
Port Everglades staff entered into discussions with Maersk Line (Maersk) and Mediterranean Shipping Company (MSC) in July 2017 for use of Port Everglades as a new port of call for a 2M Alliance container service from Europe. From these discussions, it was apparent that Port Everglades was one of two ports under consideration for this service. Maersk operates all five vessels in this "TA1/NEUATL1" North Atlantic Europe/U.S. service.
In addition to receiving a very competitive cost proposal from a Port Everglades container terminal operator to handle Maersk's business, one of the elements of cost considered by Maersk in its choice of ports was container security fees. Using the Tariff Item No. 180 authority, the Port Everglades Chief Executive/Port Director approved a reduction in container security fees in Tariff Item No. 1066 of $3.50 per full or empty container billed to Maersk by 50% for the first year of the new service, with a maximum discount of $800 per ship call, beginning from its first call at Port Everglades.
The first Maersk "TA1/NEUATL1" service container ship called at Port Everglades on August 16, 2017 on a one call-per-week basis. Over the year since the service began and projected through the end of August, 2018, Port staff estimates that more than 14,279 containers will have been discharged from or loaded on Maersk ships. Port Everglades revenue generated by the service over the first year is projected to total approximately $1,038,465. The reduction in container security fees under Tariff Item No. 180 authority will total approximately $25,000 over the same period.
Maersk and MSC remain valued customers of Port Everglades as their shipping services continue to expand. However, cost remains a factor in their choice of ports, with Maersk indicating that the other port continues to offer extremely competitive rates as an incentive to relocate the service. Continuation of the 50% reduction in container security fees is an essential component of the relationship with Maersk and MSC, and will assist with retaining the business at Port Everglades. The continued use of Tariff Item No. 180 authority for this purpose recognizes the contribution and commitment of both Maersk and MSC to Broward County.
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