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Long Beach, LA ports to charge shippers penalty if containers sit too long amid supply chain crisis

A truck passes hundreds of containers on a dock at the Port of Long Beach in Long Beach Monday, October 11, 2021. Photo by Thomas R. Cordova.

Shipping container dwell times—the number of days the metal boxes sit at a port—continue to increase in the San Pedro Bay, reaching a new high in September. But a new surcharge at the twin ports announced Monday aims to get containers moving through the facilities.

The ports of Long Beach and Los Angeles announced ocean carriers will be charged for every container that lingers within the port complex—for nine days or more if being moved by truck, and three days or more if being moved by rail. Beginning Nov. 1, carriers will be charged $100 per container, with the fee increasing $100 per container per day.

“We must expedite the movement of cargo through the ports to work down the number of ships at anchor,” Port of Los Angeles Executive Director Gene Seroka said in the announcement. “Approximately 40% of the containers on our terminals today fall into the two categories.”

“If we can clear this idling cargo,” Seroka added, “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.”

Collected fees will be reinvested by the two ports in programs to increase efficiency and address congestion, according to the announcement.

The ports, which together handle 40% of the country’s imports, have been experiencing a backlog of container ships idling off the coast, waiting for their turn within the complex, for months. According to the Marine Exchange of Southern California, the backlog set a record on Oct. 21 when 79 vessels were at anchor or adrift off the coast.

On Monday, 73 container ships were at anchor or adrift, according to the Marine Exchange.

In September, the average dwell time for containers being moved by truck reached 5.94 days, its highest level since the Pacific Merchant Shipping Association began tracking the data point in May 2016. Prior to the pandemic, dwell times were about 2.5 days, PMSA spokeswoman Jessica Alvarenga said in a Monday phone call.

Container dwell time for rail improved significantly in September compared to August, down to 5.5 days from 8.2.

“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,” Port of Long Beach Executive Director Mario Cordero said in the announcement. “The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor.”

On Friday, city officials announced the suspension of a section of the municipal code that limits the number of shipping containers that can be stacked atop one another. Previously, containers could be stacked two high, but the 90-day suspension allows for stacks of up to five depending on safety approvals.

Congestion at U.S. ports has been a major talking point on the national stage, with President Joe Biden making several public comments on the issue. The dwell time fee policy was developed in coordination with the Biden administration’s Supply Chain Disruptions Task Force, the U.S. Department of Transportation and numerous supply chain stakeholders.

“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,” John Porcari, Port Envoy to the task force, said in the announcement. “We need more players throughout the supply chain to keep stepping up.”

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