The ports of Los Angeles and Long Beach have continued to postpone their “Container Dwell Fee,” and said in a press statement that they will “revisit” it’s possible imposition on Jan. 21.
Since the fee was announced on Oct. 25, 2021, the two ports said they have seen a decline of 55 percent combined in aging cargo on the docks.
The executive directors of both ports have, so far, resisted imposing the fee based on repeated weekly “monitoring” of their container throughput data. While the port authorities have continued to delay implementation of the fee, it remains a threat to the industry.
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 previously stated.
The port authorities have said 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.