POLA and POLB postpone consideration of container dwell fee through November 18

The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said late last week that they have again postponed the implementation date for their ocean carrier Container Dwell Fee, which will now not be considered for a four-week period, until November 18.

This follows previous joint announcements by POLA and POLB, whom collectively account for roughly 40% of United States-bound import volumes, indicating that consideration of the fee would be pushed back each week. Going back to when the fee was initially rolled out on October 25, 2021, POLA and POLB said that the ports have seen a cumulative 69% decline in the amount of aging cargo on their docks.

In late October 2021, the ports announced they would start assessing surcharges to ocean carriers for import containers dwelling on marine terminals, as part of an effort to clear out the significant backlog at the ports.

As previously reported, the ports said that, as per this policy, they will charge ocean carriers for each container falling into two categories:

• for containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more; and
• for containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more

POLA and POLB previously said that, effective November 1, 2021, ocean carriers with cargo in either of these categories would be charged $100 per container, which will increase in $100 increments per container per day. The ports said that the fees collected from this initiative will be reinvested for programs to enhance efficiency, accelerate cargo velocity, and also address congestion impacts throughout San Pedro Bay.

These fees were subsequently approved by the Harbor Commissions of both ports on October 29, 2021.

POLA and POLB officials said that prior to the mid-2020 pandemic-driven run-up in imports, containers for local delivery, on average, were on container terminals for less than four days, with containers destined for trains dwelled for less than two days.

They added that any fees collected from dwelling cargo will be reinvested for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts.

“Our ship backlog has receded dramatically,” said POLA Executive Director Gene Seroka on a media briefing last week. “By and large inbound vessels are going to berth with little delay. On the land side, cargo fluidity continues to improve since the start of July. Today, we have roughly 41,000 import containers in our terminals, less than half of what it was at the height of the import surge last fall. That said, tight warehouse space is still causing some cargo owners to delay pick up of their containers or they are using those boxes for inventory storage at their facilities. We know that because the average street dwell for chassis stands at 10 days; it should be four [days]. The number of containers sitting idle in our terminals, for nine days or longer, is now down by 70%.

Seroka said that at the present time there are 35 container ships on route to the San Pedro Bay, adding that the number of inbound ships is in the mid-40s.

“We have watched this number every day, as well as the amount of cargo on the vessels, as one of the key leading economic indicators for the country,” he noted.