In an attempt to improve cargo movement amid congestion and record volumes, the San Pedro Bay, Calif., ports of Long Beach and Los Angeles are to assess a surcharge to ocean carriers for import containers that remain too long on marine terminals.
Under the new policy, the ports will charge ocean carriers for each container that falls into one of two categories. In the case of containers scheduled to move by truck, ocean carriers will be charged for every container remaining—or “dwelling”—nine days or more. For containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more. Beginning Nov. 1, the ports will charge ocean carriers with cargo in those two categories $100 per container, increasing in $100 increments per container per day.
“We must expedite the movement of cargo through the ports to work down the number of ships at anchor,” said Port of Los Angeles Executive Director Gene Seroka. “Approximately 40% of the containers on our terminals today fall into the two categories. If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports, and improve fluidity for the wide range of cargo owners who utilize our ports.”
“With the escalating backlog of ships off the coast, we must take immediate action to prompt the rapid removal of containers from our marine terminals,” said Port of Long Beach Executive Director Mario Cordero. “The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor.”
“I support the actions taken by the ports of Los Angeles and Long Beach today to charge ocean carriers for lingering containers on marine terminals. These actions aim to expedite the movement of goods and reduce congestion in our ports,” said John D. Porcari, Port Envoy to the Biden-Harris Supply Chain Disruptions Task Force. “As our economy continues to grow, increased demand and disruptions caused by the pandemic are putting our supply chains to the test. While we’ve seen new records set in terms of throughput this year at West Coast ports, we need more players throughout the supply chain to keep stepping up. The federal government will continue to bring together private companies and stakeholders from across the supply chain and serve as an honest broker helping to surface solutions like this to address supply chain disruptions.”
Before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery sat on container terminals under four days, while containers destined for trains dwelled less than two days. Those numbers have increased significantly, making it difficult to clear cargo off the terminals and bring in ships at anchor.
The ports say they will reinvest fees collected from dwelling cargo in programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay.
The policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.