Port Authority of Guam proposes labor billing hike

By Pacific Island Times News Staff

The Port Authority of Guam has filed a petition with the Guam Public Utilities Commission to raise its labor billing rates by an average of 17 percent across job classifications.

The port authority said the proposed new rates are intended as an adjustment using the current year’s cost data and would apply only to labor and equipment services tied to vessel operations that the port already performs.

“This is not a general tariff increase,” said Rory J. Respicio, general manager. “We are correcting outdated billing for work that continues every day.”

The current billing rates have not been updated since 2020, port officials said, reassuring the public that the proposed new labor billing rates would not entail an increase in wharfage, fuel surcharges, facility maintenance fees, lease rates, or crane charges.

"It is also important to clarify that the labor rates shown in the petition are not the direct salaries of port employees," the port said in a press release, explaining that the proposal reflects what carriers are billed for services, including benefit costs, payroll taxes, administrative surcharges and other support costs that are all permitted under the tariff.

The proposed rates are based on the average of the lowest and highest pay levels within each job classification, along with administrative surcharges already authorized in the tariff.

The port authority said the impact to idividual goods would be a fraction of a penny. For example: a can of Spam will go up by less than one-tenth of a cent; a 20-lb bag of rice by about two and a half cents; and a case of canned goods by just over a tenth of a cent per unit.

These examples illustrate the limited impact of the cost shift. The 17 percent figure applies to specific labor and equipment line items billed to shipping carriers, not to the full tariff and not to your grocery bill.

The adjustment, if approved, would roll out in two phases: 8.5 percent for the first four months, then 17 percent beginning in the fifth month. The phased approach gives customers time to plan and prevents abrupt cost shifts.

The board has adopted a resolution in support of the petition.

The Consumer Price Index has surpassed the 4 percent threshold, and container throughput has declined by more than 5 percent. Officials said these two conditions trigger the port’s eligibility for a broader general adjustment. However, the port is not pursuing a general rate increase.

"While the average adjustment is 17 percent across classifications, it does not translate to a 17 percent increase in shipping costs," the port saifd in a press release.

In addition to labor billing updates, officials said the petition includes a correction to equipment cost-related rates specifically tied to vessel operations. These reflect actual 2025 operating and replacement costs and are consistent with provisions already authorized under the tariff. The combined labor and equipment adjustments result in the 17 percent average cited in the petition.

“We’re not introducing anything new,” Respicio said. “We’re correcting a gap in how labor and equipment services are billed. The work is already being done. This is a targeted update based on real 2025 labor and equipment costs. It does not affect any other fees.”

The port said it committed in 2021 to hold off on any tariff increases during fiscal years 2022 and 2023 in connection with the $15 million American Rescue Plan.

“Our chief financial officer, Jojo Guevara, and the Finance Division prepared the full cost analysis and PUC petition in-house," Respicio said.

"It’s a straightforward adjustment rooted in data, based on work we already perform, and handled exactly the way any well-run business would with fairness, restraint, and accuracy," he added.

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