SoCal Ports Delay Fees for Containers Lingering in Yards
In a last-minute surprise, the ports of Los Angeles and Long Beach today announced they would delay for one week the implementation of fees for containers remaining too long in the yards. Carriers and shippers had been appealing for a delay for the fee which was due to take effect November 15, with the ports saying today that good progress is being made in reducing the number of containers.
Plans to begin charging a fee for containers staying too long in the container yards were announced in late October as one of several initiatives designed to help make space with port and government officials saying the ports were simply running out of space and the overload of containers was contributing to backlogs offloading the long line of containerships waiting for terminal space. Under the plan advocated by the Biden Administration’s supply chain Task Force, and approved by both port commissions, the fee would have started at $100 and compounded daily for containers exceeding the dwell time targets.
“We’re encouraged by the progress our supply chain partners have made in helping our terminals shed long-dwelling import containers,” said Port of Long Beach Executive Director Mario Cordero during the announcement of the delay. “Clearly, everyone is working together to speed the movement of cargo and reduce the backlog of ships off the coast as quickly as possible. Postponing consideration of the fee provides more time while keeping the focus on the results we need.”
Since the fee was announced on October 25, the ports reported a combined 26 percent decline in aging cargo on the docks. Before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery remained on container terminals under four days, while containers destined for trains dwelled less than two days. Both ports have experienced significant increases with the surcharges targeting rail containers after three days and containers traveling by trailer over nine days.
A statistical report from the Port of Los Angeles today shows that the number of containers in its yards is flat, down less than one percent, today versus a week ago, but was down as much as 16 percent at the end of last week. However, the number of containers in the yards 13 days or more is trending down with a 20 percent decline in the past week from a high of 25,802 to 20,857.
“There’s been significant improvement in clearing import containers from our docks in recent weeks,” said Port of Los Angeles Executive Director Gene Seroka. “I’m grateful to the many nodes of the supply chain, from shipping lines, marine terminals, trucks, and cargo owners, for their increased collaborative efforts. We will continue to closely monitor the data as we approach November 22.”
The ports had previously delayed the effort from a target date on November 1 with Seroka saying that they would monitor the progress and implement or revise the program as appropriate. The ports have said fees collected from dwelling cargo would be reinvested for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts.
In addition to the fees, California took steps to permit higher stacking of boxes as well as efforts to create temporary inland storage sites as well as relaxing some trucking restrictions. The ports and rail terminals expanded operations to 24/7 although some reports said truckers were not taking advantage of the extended hours. Longer-term, California has also changed rules to encourage more people to apply for commercial driver's licenses to operate the long-haul rigs.