Anchorage's port cargo surcharge nearly triples to fund a rebuild

The surcharge on cargo crossing the Don Young Port of Alaska will nearly triple on Jan. 1, to $22.76 a ton from $8.05, the first step in paying for a rebuild that has become one of the largest public works projects in state history.

The Anchorage Assembly approved the increase in April, and it climbs again to $24.63 a ton in 2028. Because the port handles goods for about 90 percent of Alaskans, the charge reaches nearly everyone. Municipal estimates put the added cost on a 5,000-pound pickup at $56.90 next year, up from about $20, with a gallon of milk rising about a dime and a bundle of shingles about 80 cents, assuming carriers pass the full charge down the line to customers.

The money pays off bonds for two new cargo terminals, now estimated at about $2 billion, more than double the roughly $947 million the city projected in 2020, when it expected grants to cover much of the cost. Construction on the first terminal began in March.

Two windfalls this year eased the climb. A $191.3 million legal settlement and $25 million in state funding won't lower the bills already pledged to existing bonds, but they let the city cancel a bond sale planned for 2027, which keeps the 2028 rate at $24.63 instead of about $31.53. "Securing these funds for the Port of Alaska means we are able to reduce the costs of goods for all Alaskans," Mayor Suzanne LaFrance said.

The way the surcharge is structured has drawn objections. It's a uniform rate, and a municipal consultant warned that charging it at TOTE's terminal for work that benefits Matson's could distort competition between the two carriers. Matson told port commissioners that uneven rates would shift business and cut into the revenue the surcharge is supposed to raise.

And the rate is not done climbing. If no more state or federal money arrives, the city's own plan projects the cargo surcharge reaching $70.43 a ton by 2033.