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POLA and POLB delay review of container living fees again to May 20

The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said late last week that they had again postponed the implementation date of their container shipping carrier Dwell Fee, which will not be no longer considered before May 20.

This follows previous joint announcements from POLA and POLB, which collectively account for approximately 40% of import volumes to the United States, indicating that the fee review would be pushed back weekly until the week of November 22. 2021.

Going back to when the fees were originally rolled out on Oct. 25, 2021, POLA and POLB said ports have seen a cumulative 50% drop in the amount of aging cargo at their docks, a tally that has been trending upward since the initial announcement of this fee.

In late October, ports announced they would begin imposing surcharges on shipping carriers for import containers housed at shipping terminals, as part of an effort to clear the large backlog at ports.

As noted earlier, ports have stated that under this policy they will charge ocean carriers for each container in two categories:

  • for containers to be transported by truck, ocean carriers will be charged for each container lodged for nine days or more; and
  • for containers transported by rail, ocean carriers will be charged if the container has been sitting for three days or more

And starting November 1, 2021, POLA and POLB previously said that ocean carriers carrying cargo in either of these categories will be charged $100 per container, which will increase in increments of $100 per container and per day. The ports said fees collected under the initiative will be reinvested in programs to improve efficiency, increase freight speeds and address the impacts of congestion in San Pedro Bay.

These charges were subsequently approved by the harbor commissions of both ports on October 29, 2021.

POLA and POLB officials said that before the pandemic-induced surge in imports in mid-2020, containers for local delivery were on average at container terminals for less than four days, with containers destined for trains remaining less than two days. .

The ports recently said the Los Angeles Board of Harbor Commissioners approved a second temporary order to extend the fees. And the Long Beach Board of Harbor Commissioners said on Monday April 18 that they would consider extending the license fee until July 28, which was made official last week.

They added that any fees collected on door-to-door freight will be reinvested in programs designed to improve efficiency, accelerate freight speeds and address the impacts of congestion.

POLA Executive Director Gene Seroka said in a recent media conference call that last week the number of ships in the queue en route to ports in San Pedro Bay rose from ‘a peak of 109 ships in January to 35 earlier this month, noting there is still a lot of work to be done, but this progress is very encouraging.

“The improvement is the combined result of the post-Lunar New Year lull in Asia and the increased fluidity at our container terminals,” he said. “In the coming weeks, we expect to see an increase in ships heading our way as retailers begin a big push to restock shelves. But we are also watching events in China very closely, with yet another surge of Covid-19 spreading in major cities and businesses China’s zero Covid policy could lead to slowdowns in ports, supply chains and factories.

And he said POLA’s efforts to speed up imports and marine terminal empties have led to improved numbers.

POLB’s Deputy Executive Director and Chief Operating Officer, Noel Hacegaba, recently told LM that the fee truly represents one of three major actions POLB has taken to address supply chain disruptions.

“One of the very first things we did was activate vacant land inside the port,” he said. “To date, we have reallocated over 130 acres of vacant land. That’s a huge amount of terrain that we’ve applied to this challenge, and the idea is very simple. Warehouse capacity is at an all-time low. The vacancy rate in the Inland Empire, which is about 60 to 70 miles from ports, is about 1%. So, in the absence of storage capacity, we noticed that the containers were piling up in the terminal, and that’s what was creating this backlog of ships. By providing land inside the port, it allowed our terminals and our shippers to take out these boxes, and it immediately relieved the terminals. The second major step we took was to extend the opening hours of the port. One of our terminals, TTI, has been open 24 hours a day, four days a week since October. All other terminals in the Southern California complex open earlier and close later…expanding hours of operation.

Regarding the impulse of container dwell charges, Hacegaba said that POLB and POLA started to see a surplus of containers spending three times as long inside the terminal once loaded. on a ship, which in turn created a lot of problems for the terminals.

“This fee was intended to encourage shippers to remove these inbound containers more quickly,” he noted. “I can tell you the fee has worked, and that’s one of the reasons we haven’t collected it. We’ve been evaluating it week by week, and every week since we announced the fee, we’ve When we first announced it, inbound containers loaded, at POLB, that had been sitting on the terminal for nine days or more represented approximately 35% of all containers on the terminal. is closer to 11%.From the time we introduced the fee at the end of October until January 14, this percentage of containers in the terminal nine days or more has decreased by 50%, at POLB.The fee has worked, and that’s why we haven’t applied them.We evaluate it week after week and encourage all our stakeholders to continue to do their part.

About the Author

Jeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics management, Modern material handlingand Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine where he covers all aspects of the supply chain, logistics, freight forwarding and material handling industries on a daily basis. Contact Jeff Berman