Houston, We Have a Problem

Date: Friday, November 11th, 2022
Source: Sourcing Journal

Count Port Houston on the list of ports looking to incentivize faster movement of import containers off its docks to relieve cargo congestion.

The port is expected to begin enforcing its Sustained Import Dwell Fee Dec. 1, which would see a $45 per container per day charge. The clock on the tariff begins on the eighth day after a container has gone past its allotted free time, or period in which it is allowed to be stored at the port for no fee.

The Port of Houston Authority’s Port Commission also approved last week a separate fee, called the Excessive Import Dwell Fee, on long-dwelling loaded import containers. The tariff starts with a $50 per day charge on containers sitting one to three days after the expiration of free time. The fee continues to increase in increments of $25 the longer the container sits, reaching up to as much as $150 per day 14 or more days after the expiration of free time.

This second fee has not yet been implemented and is to be rolled out at the discretion of Port Houston executive director Roger Guenther.

“This new fee structure is aimed to help mitigate the issue of long-dwelling loaded import containers by incentivizing cargo movement,” Port Houston said at the time of the commission’s approval of the fees.

East and Gulf Coast ports have been hit with a surge of imports as shippers bypass the West Coast ports. The facilities have been seen as alternatives to the congestion at Los Angeles and Long Beach during the height of the pandemic and, more recently, are viewed as options to bypass any potential disruptions that could be caused by the extended labor contract talks for West Coast dockworkers.

Port Houston said in its most recent monthly volume report it handled 353,525 twenty-foot-equivalent units (TEUs) in September. The total reflects a 26 percent year-over-year increase and the second highest volume month after August.

Container volume so far this year is up 18 percent at Houston.

“We are doing everything we can to maintain fluidity at our terminals,” Houston’s Guenther said at the time of the September volume report.

Those efforts have included allocating additional space on terminals and in off-site container yards, along with Saturday gate hours.

The Port of New York and New Jersey planned to install in September what it called a container imbalance fee on a quarterly basis. The fee on ocean carriers was aimed at paring back the number of empty containers sitting on the docks. The organizagtion cited record cargo volume, with Port Authority executive director Rick Cotton saying the port was using “every tool in our toolbox to ensure that the flow of goods and business will continue” in explaining the thinking behind the fee.

The warning of the fee’s implementation appeared to be enough to motivate carriers. The Port Authority later said its message was received “loud and clear,” with 10 ships scheduled to visit the port in October to pick up the empty containers as other carriers re-worked vessel routes to allow for increased pick-ups.

The efforts led to a reworked fee schedule, which went into effect Oct. 1, and allows carriers to address any quarterly empty container imbalance over the course of four quarters.

“We’re happy wherever the empty containers go, as long as they’re out of the port and no longer taking up space that should be used for incoming imports that are coming in record numbers each month,” the Port Authority’s Port Department director Bethann Rooney said last month at the time of the rejiggered fee schedule.

The Port of New York and New Jersey maintained its position as the country’s busiest container port for the second month in a row in September. The facility handled 842,219 TEUs in September, which was up nearly 35 percent from September 2019.

Meanwhile, the ports of Los Angeles and Long Beach have continued to delay implementation of their container dwell fee, which was first announced in October 2021. The San Pedro Bay ports most recently said the fee would be held off from consideration until Nov. 18, citing a 69 percent drop in the number of long-dwelling containers.


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