What You Need to Know About Ports of LA/Long Beach Container Excess Dwell Fee

Effective Nov. 1, the Ports of Los Angeles and Long Beach have implemented a new “Container Excess Dwell Fee,” payable by ocean common carriers (vessel-operating common carriers or VOCCs). The Container Excess Dwell Fee, introduced to facilitate the easing of unprecedented port congestion, will be assessed for each discharged container transported under a VOCC’s bill of lading that “dwells” on marine terminals beyond a prescribed period depending on the modality of the container, explained NCBFAA Transportation Counsel Ashley Craig. This initiative was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation, and multiple supply chain stakeholders.

Calculation of the Fee. In the case of containers scheduled to move by truck (local), VOCCs will be charged for every container dwelling eight days or more following vessel discharge. For containers moving by rail (intermodal), VOCCs will be charged for every container dwelling five days or more following vessel discharge. The fee will be $100 per container, increasing in $100 increments per container per day of excess dwell time beyond the prescribed period. For example, for a container that dwells three days beyond the prescribed period, the fee will be $100 on the first day, $200 on the second day and $300 on the third day – for a total of $600.

Mitigation by NVOCCs. We anticipate that VOCCs will begin to offset this charge and pass it along to non-vessel-operating common carriers (NVOCCs), subject to the 30-day waiting period for tariff rate increases as required by the Shipping Act. NVOCCs should therefore expect to be assessed the additional charges on or about Dec. 1. NVOCCs have several options for mitigating the charge including (i) amending their Negotiated Rate Arrangements (NRAs) with shippers to pass through the charges; (ii) amending their NVOCC Service Arrangement (NSAs) with shippers to offset the charges; and (iii) updating their tariffs to offset the charges, subject to the waiting period. These amendments and changes to mitigate the charges must be made in a form compliant with the Shipping Act and Federal Maritime Commission (FMC) regulations.