The ports of Los Angeles and the Port of Long Beach continue to postpone their “Container Dwell Fee,” this time until Jan. 17. The fee was previously set to take effect on Monday, Jan. 10.
Since the fee was announced on Oct. 25, the two ports said they have seen a decline of 45 percent combined in aging cargo on the docks.
The executive directors of both ports said they will continue reassess the fee implementation after another week of monitoring data.
Under the temporary policy approved Oct. 29 by the Harbor Commissions of both ports, ocean carriers can be charged for each import container that falls into one of two categories: In the case of containers scheduled to move by truck, ocean carriers could be charged for every container dwelling nine days or more. For containers moving by rail, ocean carriers could be charged if a container has dwelled for six days or more.
Congestion Excess Dwell Fee assessments at the ports of Los Angeles and Long Beach were first scheduled to begin Nov. 15 for all containers that have been on dock at least nine days, but the fee implementation has been continuously reset each Monday since then by the two ports.
The fee has been set at $100 per container, increasing in $100 increments per container per day of excess dwell time beyond the prescribed period. The fee assessed on the ocean carriers is based on the published tariffs set by the ports of Los Angeles and Long Beach.
“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,” the port authorities said.
The port authorities have stated that the fees collected from dwelling cargo will be “reinvested for programs designed to enhance efficiency, accelerate cargo velocity and address congestion impacts.”
Although the fees continue to be delayed by the port authorities, NVOCCs should contact their ocean carriers to determine which category their cargo falls under and how/if they will be charged the fee.
NCBFAA Transportation Counsel Venable anticipates that VOCCs will begin to offset this charge and pass it along to NVOCCs, subject to the 30-day waiting period for tariff rate increases as required by the Shipping Act. 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.
Also on Jan. 10, California Gov. Galvin Newsom announced his 2022-23 state budget proposal, known as “The California Blueprint.” The proposed budget includes a planned record investment of $2.3 billion for California ports.
The Governor’s $2.3 billion plan for ports includes:
Port Infrastructure and Goods Movement—$1.2 billion for port-related projects that increase goods movement capacity on rail and roadways serving ports and at port terminals, including railyard expansions, new bridges, and zero-emission modernization projects.
Zero-Emission Equipment and Infrastructure—$875 million for zero-emission port equipment, short-haul (drayage) trucks, and infrastructure.
Workforce Training—$110 million for a training campus to support workforce resilience in the face of supply chain disruption and accelerate the deployment of zero emission equipment and technologies.
Commercial Driver’s Licenses—$40 million to enhance California’s capacity to issue Commercial Driver’s Licenses. Operational and Process Improvements—$30 million for the Governor’s Office of Business and Economic Development to provide funding for operational and process improvements at the ports. This could include enhancing the movement of goods and improving data interconnectivity between the ports to enable efficient cargo movement, reduce congestion, and create opportunities to increase cargo volume by promoting and building supply chain efficiency.