Port seeks 17% tariff adjustment as it pushes for crane replacement funding | Local Business | postguam.com

RESPICIO: Rory Respicio, Port Authority of Guam general manager, speaks during a Guam Chamber of Commerce general membership meeting at the Hilton Guam Resort and Spa in Tumon on Wednesday, June 25, 2025. Frank San Nicolas/The Guam Daily Post

The Port Authority of Guam is requesting a 17% tariff adjustment from the Public Utilities Commission, marking the first labor rate update since 2020, while simultaneously pursuing multiple funding sources to replace three aging gantry cranes that are more than 42 years old.

Port General Manager Rory Respicio presented the tariff petition to the Guam Chamber of Commerce General Membership Meeting on Wednesday, emphasizing that the request is not a general rate increase but specifically targets labor billing rates to reflect 2025 standards.

"This is a tariff adjustment. It's not a general tariff increase. It updates our labor billing from 2020 to 2025," Respicio said during his presentation at the Hilton Guam Resort & Spa.

The port has operated within the same $4.8 million monthly budget allocation since 2019, with workforce levels remaining stable at around 377 employees. Despite absorbing additional responsibilities including cruise ship operations, military surge cargo, and cybersecurity upgrades, the port has maintained operations without significant personnel increases.

"We remain 100% operational throughout the COVID-19 pandemic. We reopened three days after Typhoon Mawar," Respicio said.

The proposed adjustment would be implemented in phases, starting with an 8.5% increase for the first four months, followed by the full 17% rate thereafter. The increases apply only to labor billing and exclude crane surcharges, facility maintenance fees, marina fees, fuel surcharges and leases.

Respicio demonstrated minimal consumer impact from the adjustment. The port calculated the 17% figure by analyzing current labor rates across various port positions.

Chamber members raised concerns about the scope of increases, particularly regarding security personnel costs. One member noted an 88% increase in security guard salaries from $36 to $65 per hour.

"That 88% increase for security, that's tied to the cruise ship operations," Respicio explained. "When a cruise ship comes in, the majority of the port attention is really on security, so that's port police."

The tariff petition comes as the port pursues three separate funding streams for critical gantry crane replacement. The current cranes, purchased used from the Port of Los Angeles, are scheduled for retirement between 2026 and 2030.

"If one crane went down, it'll set back the military readiness program by about four years," Respicio said. “I got the chance to be with the governor in meetings with the Pentagon. At the Pentagon, that's what she tells DOD.”

“Congressman Moylan was able to put, he called me, and he said, ‘Rory, I was able to put the $60 million preparation in the big, beautiful bill’,” said Respicio, while Gov. Lou Leon Guerrero is advocating through the Department of Defense's economic adjustment process. The port has also submitted a third grant application to the Maritime Administration.

"It's like a race to the finish. Whatever happens first is what we're going to go with," Respicio said in a post-presentation interview with The Guam Daily Post.

The port has secured $106.5 million in federal grants over the past decade for modernization projects, demonstrating its ability to leverage external funding rather than relying solely on tariff increases.

During the meeting, questions arose about the Attorney General's proposal for 100% container inspections. Respicio defended current Customs practices, noting that inspection rates at Guam's port align with national averages.

"The biggest misconception is that there's a perception being played out that customs is just releasing containers at will. They have prescreening. They have screening. They have targeted containers," Respicio said.

He explained that 100% inspections would require three to four hours per container and would necessitate shifting stevedores and cargo checkers from vessel discharge operations to assist customs inspections.

An audience member from an ocean carrier company emphasized the need for adequate staffing levels to maintain port productivity.

"Just making sure there's enough people at the port, especially in the operations group," the member said. "That's what drives the productivity of the port."

Respicio acknowledged workforce challenges but stressed that gantry crane maintenance remains the top priority.

"The priority of those gantry cranes are, there's no deferring maintenance there, that's the priority," he said.

The port has developed a comprehensive port readiness plan identifying federal investment needs for Indo-Pacific military readiness, including gantry crane replacement, wharf improvements, fuel pier upgrades and cybersecurity enhancements.

Respicio concluded by emphasizing that the tariff adjustment represents fiscal responsibility rather than expansion.

"This tariff adjustment is not about a new bond or a bond borrowing," he said. "What this is, is just looking at our business model and looking at how our rates right now are not tied to 2025 and how that has to be updated."

The Public Utilities Commission will review the petition, with the port requesting automatic tariff reviews every three years to avoid future lengthy petition processes.

Poll results are published every Monday in The Guam Daily Post.