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PORT OF LA/LONG BEACH TO CHARGE OCEAN CARRIERS DAILY FEE FOR CONTAINER BACKLOG
October 25, 2021
In an effort to improve cargo movement amid congestion and record volume, the ports of Long Beach and Los Angeles will begin assessing a surcharge to ocean carriers for import containers that dwell on marine terminals.
In a statement, the San Pedro Bay ports said under the new policy, the ports will charge ocean carriers for each container that falls into one of two categories.
In the case of containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more. For containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more.
US$100 per container charge
The ports noted that beginning Nov. 1, the ports will charge ocean carriers with cargo in those two categories US$100 per container, increasing in US$100 increments per container per day.
“We must expedite the movement of cargo through the ports to work down the number of ships at anchor,” said Port of Los Angeles executive director Gene Seroka.
“Approximately 40% of the containers on our terminals today fall into the two categories. If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports, and improve fluidity for the wide range of cargo owners who utilize our ports.”
For his part, Port of Long Beach executive director Mario Cordero said the persisting port congestion issues requires immediate action.
“With the escalating backlog of ships off the coast, we must take immediate action to prompt the rapid removal of containers from our marine terminals,” Cordero said.
“The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor.”
John D. Porcari, Port Envoy to the Biden-Harris Supply Chain Disruptions Task Force signalled his support for the new policy.
“I support the actions taken by the ports of Los Angeles and Long Beach today to charge ocean carriers for lingering containers on marine terminals. These actions aim to expedite the movement of goods and reduce congestion in our ports,” said Porcar.
“As our economy continues to grow, increased demand and disruptions caused by the pandemic are putting our supply chains to the test. While we’ve seen new records set in terms of throughput this year at West Coast ports, we need more players throughout the supply chain to keep stepping up.”
Spike in cargo dwelling times
The ports noted that before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery sat on container terminals under four days, while containers destined for trains dwelled less than two days.
Those numbers have increased significantly, making it difficult to clear cargo off the terminals and bring in ships at anchor, it added.
Fees collected from dwelling cargo will be re-invested by the two ports for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay.
The ports noted that the new policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.
The Port of Los Angeles and Port of Long Beach are the two largest container ports in the nation, first and second respectively, and combined are the ninth-largest port complex in the world.
