Los Angeles, Long Beach Ports Establish Excess Container Dwell Fees
The Ports of Los Angeles and Long Beach released a joint plan last week to impose an excess container dwell fee as part of an effort to clear boxes from terminals more quickly. The surprise announcement outlined a 90-day strategy that would it would increase fees per container for every day elapsed past the free storage window.
The boards of harbor commissioners formally approved the plan in a meeting Friday.
What’s in the Plan?
Here are the currently available details:
- The ports intend to use these impending fees to coax carriers into moving carriers from terminals more efficiently — containers are currently dwelling an average of nine days.
- A twofold strategy has taken shape for carriers slated for movement either by rail or by truck.
- Containers scheduled to move via truck have a nine-day window from arrival before charges incur. Those scheduled to move by intermodal rail have a six-day window.
- Per reports, fees start at $100 per container on the first day of tardiness. Fees then increase $100 per container per day.
- The Ports of Los Angeles and Long Beach take charge of fee collection.
- Moneys collected will be invested in port efficiency programs.
- The ports will begin analyzing container dwell data November 1 and fees could begin as early as November 15.
Port of Los Angeles Executive Director Gene Seroka indicated that the start date for fee assessment is flexible according to performance.
“Starting Monday (Nov 1), we will be taking daily data snapshots of how long import containers sit on our container terminals,” Seroka said in a statement. “If progress is being made clearing our docks, I have the discretion to delay the start of fees beyond Nov. 15. Our goal is to see significant improvement on our docks so that we don’t need to administer any fees.”
Chassis Shortage, Full Warehouses Create Difficult Situation
The freight-moving environment along the west coast is likely to stymie efforts to move boxes ahead of container dwell surcharges. Even with maximum effort, road blocks like a severe chassis shortage and limited regional warehouse capacity make it physically difficult to move boxes in the first place. Carriers are bracing for impact as a result.
Questions Remain for Importers, Retailers, and More
The final-hour announcement has left questions around the implications of these fees.
While the ports will collect fees directly from ocean carriers, reports show that steamship lines are already passing the bill onto import clients. Shippers may encounter their own costly surcharges as a result of the fees. Additionally, the official start days for fee assessment remains unclear.
Scarbrough International is tracking developments of this news and will pass on updates as they become available.
The Ports of Los Angeles and Long Beach have implemented a new Container Excess Dwell Fee policy effective November 1, 2021. Assessments began Monday, November 22 with charges beginning December 1. Created through coordination between the ports, the White House, the Department of Transportation, and others, the new dwell surcharges aim to accelerate the clearing of containers from southern California terminals.