Ocean carriers who are usually the ones charging “surcharges”, may soon be paying a “surcharge” at the San Pedro Bay ports of Long Beach and Los Angeles for import containers that dwell in the marine terminals of these ports for longer periods.
As per a communique from the Port of Long Beach, this surcharge which comes into effect from the 1st of November, is in “an effort to improve cargo movement amid congestion and record volumes”.
As per the new policy, ocean carriers will pay the port for containers falling under below categories :
- For containers that are scheduled to move by truck, ocean carriers will be charged USD100/- per container per day increasing in increments of USD100/- per container per day, if the containers have been sitting in the terminals for nine days or more.
- For containers that are scheduled to move by rail, ocean carriers will be charged USD100/- per container per day increasing in increments of USD100/- per container per day, if the containers have been sitting in the terminals for three days or more.
“We must expedite the movement of cargo through the ports to work down the number of ships at anchor,” said Port of Los Angeles Executive Director Gene Seroka. “Approximately 40% of the containers on our terminals today fall into the two categories. If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports, and improve fluidity for the wide range of cargo owners who utilize our ports.”
“With the escalating backlog of ships off the coast, we must take immediate action to prompt the rapid removal of containers from our marine terminals,” said Port of Long Beach Executive Director Mario Cordero. “The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor.”
“I support the actions taken by the ports of Los Angeles and Long Beach today to charge ocean carriers for lingering containers on marine terminals. These actions aim to expedite the movement of goods and reduce congestion in our ports,” said John D. Porcari, Port Envoy to the Biden-Harris Supply Chain Disruptions Task Force. “As our economy continues to grow, increased demand and disruptions caused by the pandemic are putting our supply chains to the test. While we’ve seen new records set in terms of throughput this year at West Coast ports, we need more players throughout the supply chain to keep stepping up. The federal government will continue to bring together private companies and stakeholders from across the supply chain and serve as an honest broker helping to surface solutions like this to address supply chain disruptions.”
As per the communique, before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery sat on container terminals under four days, while containers destined for trains dwelled less than two days. Those numbers have increased significantly, making it difficult to clear cargo off the terminals and bring in ships at anchor.
The notification from the port advised that the fees collected from dwelling cargo will be re-invested by the two ports for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay.
The policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.
Although President Biden stepped up pressure on ports and supply chains to address port congestion woes and the ports responded by extending working hours, there doesn’t seem to be much activity at the gates in Long Beach or Los Angeles as below images show.
Eventually whether ocean carriers will agree to these surcharges or naturally pass it onto customers remains to be seen.
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