The implementation of a new fee on containers that have sat at the ports of Los Angeles and Long Beach for several days has been put on hold.
Port officials said the ports will “delay consideration” of the container dwell fee until at least Nov. 22, citing progress in clearing containers without the penalty.
Monday’s announcement marks the second postponement of charging the fee. The policy was first announced late last month and was slated to go into effect Nov. 1, and officials later changed the implementation date to Nov. 15.
“Clearly, everyone is working together to speed the movement of cargo and reduce the backlog of ships off the coast as quickly as possible,” Port of Long Beach Executive Director Mario Cordero said in a written statement. “Postponing consideration of the fee provides more time, while keeping the focus on the results we need.”
The port of Los Angeles also reported success. “There’s been significant improvement in clearing import containers from our docks in recent weeks,” said Port of Los Angeles Executive Director Gene Seroka. “I’m grateful to the many nodes of the supply chain, from shipping lines, marine terminals, trucks and cargo owners, for their increased collaborative efforts.”
Port officials said they will continue to closely monitor data on container dwell times over the coming week.
Since the fee was announced on Oct. 25, the twin ports have seen a decline of 26% combined in aging cargo on the docks, which officials at both ports cite as justification for delaying in implementation of the fee. Under the temporary policy approved Oct. 29 by the Harbor Commissions of both ports, ocean carriers would be charged for import containers left to dwell at the port for an extended period of time.
In the case of containers scheduled to move by truck, ocean carriers would be charged $100 for every container dwelling nine days or more. For containers moving by rail, ocean carriers would be charged the same amount if a container has dwelled for six days or more. The penalty would increase in $100 increments per container per day until the container left the terminal.
The policy was initially developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation, Port of Los Angeles and multiple supply chain stakeholders. Any fees collected from dwelling cargo would be reinvested for programs designed to enhance efficiency, accelerate cargo velocity and address congestion impacts, according to port authorities.
Before imports began to surge in mid-2020, containers for local delivery by truck remained on container terminals for less than four days on average, while containers destined for trains dwelled less than two days. In August, that number had increased to 8.2 days, according to the Pacific Merchant Shipping Association, and in September, containers destined for local delivery by truck waited an average of 5.94 days, its highest level since the association began tracking the dwell times in May 2016.