The Container Dwell Fee announced by the San Pedro Bay ports of Long Beach and Los Angeles on the 25th of October 2021 will be no more from the 24th of January 2023.
This phasing out was announced by both ports on the 16th of December on the back of both ports seeing a combined decline of 92% in aging cargo on the docks since the announcement of these charges.
As per a press release, while the executive directors of both ports have had the authority from their respective harbor commissions to implement the fee, it was never activated because cargo owners were able to clear their long-dwelling cargo off terminals.
Announcing this phasing out, Port of Los Angeles Executive Director Gene Seroka said “I said when we launched this program that I hoped we would never collect a dime because that would mean that containers were moving off our docks. And that’s exactly what occurred. I’m grateful to the cargo owners and all our waterfront workers for all their successful efforts to improve the efficiency of our operations.”
“This fee was conceived as an incentive to ease congestion, keeping imported goods flowing to stores across America,” added Port of Long Beach Executive Director Mario Cordero. “Measured by this standard, we can all appreciate the policy’s success, and best of all, the fee was never implemented. We thank cargo owners and terminal operators for working with us to make operations more efficient, and of course dockworkers for their dedicated labor.”
Under the temporary policy, ocean carriers were set to pay container dwell fees to 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.
Since its implementation, there have been consecutive extensions of the applicable dates for the charges which eventually were never billed to the carriers.
Matt Schrap summed up the effect of this charge nicely in his LinkedIn post “While the “fee that never was” quite possibly had its intended effect without collecting a penny, it gave several terminals in LA/LB (and Oakland) the idea to fee dwelling containers…which is still being collected.”
Even New York jumped on the bandwagon of container surcharges announcing a Container Imbalance Fee, but now with both West Coast ports returning to normal operations and China announcing a pullback in its zero COVID policies, it remains to be seen if the volumes that fled to the East Coast will come back to the West Coast, especially while an agreement between the ILWU and PMA remains elusive.