$100-a-Day Container Dwell Fees Tabled Again

Date: Wednesday, December 29, 2021
Source: Sourcing Journal

The Ports of Long Beach and Los Angeles put off container dwell fees aimed at expediting cargo flows and relieving ongoing congestion.
On Monday, the two gateways making up the San Pedro Bay port complex said they would delay a decision on whether to enact the fees, first announced on Oct. 25, until Monday. The executive directors of both ports will monitor data this week and reassess if the fines, postponed eight times already, need to take effect in the new year.

In theory, the program incentivizes shippers to quickly clear their cargo from the docks and eliminate the pileups seen in recent months. Ocean carriers would be charged for every container dwelling at the dock for nine days or more that was scheduled to be moved by truck; train-bound container would be charged if idle for more than six days. The fees would begin at $100 per container, and increase by $100 every day that the container lingered in the terminal.

Prior to the surge in imports that began in the summer of 2020, containers averaged of four days or less at the terminals, while train-bound boxes spent less than two days before moving. Those dwell times averaged nine days in November and were weeks-long at points throughout the year.

However, the threat of fines spurred a 41-percent decline in languishing cargo over the past two months.

“We’re satisfied that shipping lines are continuing to make efforts to move aging inbound containers out and creating capacity in the terminals,” Port of Long Beach executive director Mario Cordero told Sourcing Journal Tuesday. “At this point, we are evaluating the situation each Monday and making decisions based on the evolving dwell data we are seeing.”

“We’re thankful for the efforts our terminal operators, railroads and motor carriers are making to clear this backlog,” he added.

The movement toward 24/7 operations is also making an impact. The Port of Long Beach piloted a round-the-clock schedule at the Total Terminals International terminal on Pier T in September, permitting trucks to access the facility during the low-traffic late-night and early-morning hours. The holiday season has slowed progress on this front, according to the ports.

The limited-time dwell fees, should they take effect, will be reinvested into efficiency-enhancing processes. The Biden-Harris Supply Chain Disruptions Task Force and the U.S. Department of Transportation (USDOT), led by Secretary Pete Buttigieg, developed the program to address port congestion.

Last week, the Port of Long Beach received a $52.3 million grant from the USDOT’s Maritime Administration (MARAD) to develop the Pier B On-Dock Rail Support Facility geared at transporting more cargo by train, enhancing the facility’s productivity and diverting the task from trucks.

 

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