The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) announced late last week that they have again pushed back the implementation date for their container dwelling fee for their shipping line, which will now not be taken into account until May 20th.
This follows previous joint announcements by POLA and POLB, which together account for approximately 40% of import volume into the United States, indicating that consideration of the fee will be pushed back to the week of November 22, 2021 each week.
When the fee was first introduced on October 25, 2021, POLA and POLB said ports saw a cumulative 50% decline in the amount of aging cargo in their docks, a tally that has trended upwards since 2021’s initial announcement Fee.
In late October, ports announced they would start levying shipping line surcharges on import containers at sea terminals to help clear the significant backlog at ports.
As previously reported, ports indicated that under this policy they will charge ocean carriers for each container that falls into two categories:
- for containers that are to be transported by truck, shipping companies are charged a fee for each container stay of nine days or more; and
- for containers transported by rail, shipping companies are charged if the container stays for three days or more
And as of November 1, 2021, POLA and POLB previously said shipping lines carrying cargo in any of those categories would be charged $100 per container, increasing in increments of $100 per container per day. The ports said fees collected from this initiative will be reinvested in programs to increase efficiency, accelerate cargo speeds and address the effects of congestion throughout San Pedro Bay.
These charges were subsequently approved by the port commissions of both ports on October 29, 2021.
POLA and POLB officials said that prior to the pandemic-driven surge in imports in mid-2020, containers destined for local delivery spent less than four days at container terminals on average, with containers destined for trains lingering less than two days.
The ports recently announced that Los Angeles port commissioners approved a second injunction to extend the fee. And the Long Beach Board of Harbor Commissioners said Monday, April 18, they would consider extending approval for the fee through July 28, which was made official last week.
They added that any fees collected for residential freight will be reinvested into programs aimed at increasing efficiencies, accelerating freight speeds and addressing the impact of congestion.
Gene Seroka, executive director of POLA, said in a recent conference call that the number of ships waiting in line en route to San Pedro Bay ports has fallen to 35 earlier this month from a peak of 109 ships in January, he said there noted There is still much work to be done, but this progress has been very encouraging.
“The improvement is a combined result of the… post-Lunar New Year calm in Asia and increased fluidity at our container terminals,” he said. “In the coming weeks we expect an increase in ships coming our way as retailers give a big push to stock the shelves. But we are also closely monitoring events in China, where another wave of Covid-19 is spreading through major cities and businesses. The zero-Covid policy that China has introduced could cause slowdowns in ports, supply chains and factories.”
And he said POLA’s efforts to get imports and empties off sea terminals more quickly had resulted in improved numbers.
POLB Deputy Executive Director and Chief Operating Officer Noel Hacegaba recently told LM that the fee is truly one of three key actions POLB has taken to address supply chain disruptions.
“One of the very first things we did was activate vacant land within the port,” he said. “To date we have repurposed more than 130 acres of fallow land. That’s a massive amount of land that we’ve dedicated to this challenge, and the idea behind it is very simple. Storage capacity is at an all-time low. The vacancy rate in the Inland Empire, which is around 60 to 70 miles from the ports, is around 1%. So, due to lack of storage capacity, we noticed that containers were piling up in the terminal, causing this ship jam. By providing land within the port, our terminals and our shippers were able to push out those boxes and the terminals were immediately relieved. The second major measure we took was to extend the hours of operation in the port. One of our terminals, TTI, has been open 24 hours a day, four days a week since October. Every other terminal in the Southern California complex opens earlier and closes later…thus increasing hours of operation.”
As for the impetus of the container residence tax, Hacegaba said that POLB and POLA began to see that a surplus of containers stayed in the terminal three times as long once loaded from a ship, which in turn caused a lot of problems for the terminals.
“This fee should encourage shippers to remove these incoming containers faster,” he noted. “I can tell you the fee worked and that’s one of the reasons we didn’t collect it. We’re evaluating it week-to-week, and since we announced the fee, we’ve moved it every week. When we first announced it, POLB’s loaded inbound containers that were in the terminal for nine days or more accounted for approximately 35% of all containers in the terminal. Today that number is closer to 11%. From the introduction of the fee at the end of October to January 14, this percentage of containers in nine or more terminal days at POLB has fallen by 50%. The fee worked, and that’s why we didn’t implement it. We evaluate it weekly and encourage all our stakeholders to keep contributing.”
About the author
Jeff Berman, Group News Editor Jeff Berman is Group News Editor for logistics management, Modern conveyor technologyand Supply chain management review. Jeff works and lives in Cape Elizabeth, Maine, covering all aspects of supply chain, logistics, freight transportation and materials handling on a day-to-day basis. Contact Jeff Berman