SoCal ports could fine carriers for tardy containers by Nov. 15

Date: Friday, October 29, 2021
Source: Freightwaves

Port authorities in Los Angeles and Long Beach plan to start assessing and collecting late fees on loaded import containers that remain on the docks for extended periods as soon as Nov. 15. The information was disclosed in agendas for emergency meetings of the respective harbor commissions on Friday.

The boards will vote on plans submitted by port staff to charge ocean carriers $100 per day, increasing in $100 increments per container per day, for containers scheduled to move locally by truck that are left for nine days or more, and for containers scheduled to move by intermodal rail that dwell for six days or more. The levies are effective Nov. 1.

The “Container Excess Dwell Fee,” which was designed in close coordination with the Biden administration and unidentified industry stakeholders as a way to incentivize faster pickup of containers, is scheduled to last for 90 days, according to the agendas. The goal is to free up space for several crowded terminals that are preventing ships from efficiently discharging cargo, resulting in a queue of 74 container vessels waiting outside the port for a parking spot.

The surcharge will be billed to ocean carriers and collected (directly or through an appointed agent) on a monthly basis, according to the Port of Long Beach’s proposed tariff. Monies collected will be deposited in a fund to cover the cost of special projects for expediting cargo.

The ports announced the late storage fees on Monday, did not indicate then that they were subject to commission approval.

Freight transportation companies have widely criticized the measure, saying it was developed with good intentions but could make matters worse by using up remaining chassis for off-port storage and that they are misguided because there is nowhere for full warehouses to put incoming cargo. And, while vessel operators handle the inland transportation on their customers’ behalf, they have no control over haulage directly managed by importers.

The biggest concern is that ocean carriers will pass the cost onto shippers that paid for the transport.

According to the temporary order described in the agenda, assessment of the demurrage fees on carriers would start no earlier than Nov. 15 after the executive gives final notice at a public board meeting. The Los Angeles Harbor Commission is scheduled to meet in regular session on Nov. 18.

In related news, the Los Angeles Harbor Commission is being asked to approve a $2.5 million work order for improving a 10-acre parcel for the temporary storage of chassis and containers to help relieve congestion at the terminals.

 

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