Port operations

Approval

What government approvals are required in your jurisdiction for a port operator to commence operations following construction? How long does it typically take to obtain approvals?

See question 5. In addition to meeting all local requirements relating to building codes, fire codes, hazardous materials storage and handling and other unique port-specific approvals, terminals must comply with numerous federal operating requirements, as detailed above. For example, FMC-regulated terminals are required to register with the agency before commencing operations, facility security plans must be filed with the Coast Guard, Longshore Act cover must be secured under Labor Department rules and compliance with federal environmental permitting requirements must be established.

An equally important undertaking, however, is securing agreements for port labour. In several markets this may require becoming part of a collective bargaining unit and participating in multi-employer pension and benefit plans under the relevant union’s collective bargaining agreement, pursuant to the Employee Retirement Income Security Act (ERISA) and related legislation.

Typical services

What services does a port operator and what services does the port authority typically provide in your jurisdiction? Do the port authorities typically charge the port operator for any services?

It is difficult to generalise, as no two port authorities take an identical approach to dividing responsibilities between the port authority and the tenants or other service providers, and usually the fine details of the relationship are subject to negotiation and contract. However, it is not uncommon for a port authority to assess wharfage and dockage charges on a vessel calling there for use of the berth, even for cargo that is being unloaded from the vessel to a leased terminal. In some ports, cranes and other cargo handling equipment may belong to the port as well, to be operated for a fee. In some ports, tugs and pilots are the responsibility of the port, or a related commission.

One key overarching principle to keep in mind is that public port authorities and local government cannot impose taxes or fees on cargo moving through the port, other than bona fide user fees for services and benefits arising from use of port facilities or services. These restrictions derive from the Shipping Act and the Rivers and Harbors Act (33 USC section 5), as well as the Tonnage Clause of the US Constitution. Accordingly, it is not uncommon for ports to adopt fees supporting port security, first responders and even some shared environmental and infrastructure improvement. They are largely foreclosed from charging carriers and tenant terminals simply for using or navigating the port’s harbours and waterways.

Access to hinterland

Does the government or relevant port authority typically give any commitments in relation to access to the hinterland? To what extent does it require the operator to finance development of access routes or interconnections?

Given the widespread concerns regarding congestion and emissions around US ports (particularly container terminals), negotiation over inland transportation linkages, especially the financing and development of rail access and roadway improvements, are key commercial elements of many terminal deals.

Suspension

How do port authorities in your jurisdiction oversee terminal operations and in what circumstances may a port authority require the operator to suspend them?

See question 5.

Port access and control

In what circumstances may the port authorities in your jurisdiction access the port area or take over port operations?

With regard to taking over port operations, terminal leases generally have detailed provisions regarding remedies for breach, including the standards and processes for a landlord port to terminate a lease. Regarding access, port authority officials and other regulators, including Coast Guard, Customs, APHIS and other agency representatives, routinely visit terminal operations as part of their oversight roles. Such access is generally provided for in terminal agreements.

Failure to operate and maintain

What remedies are available to the port authority or government against a port operator that fails to operate and maintain the port as agreed?

See question 41.

Transferrable assets

What assets must port operators transfer to the relevant port authority on termination of a concession? Must port authorities pay any compensation for transferred assets?

This issue is generally addressed in the text of terminal lease agreements. Generally, infrastructure, buildings, fixtures and other improvements (but not moveable equipment) revert to the landlord port at the end of the lease term, but tenants may seek prospectively to negotiate compensation for such investments.