Ocean Carriers to Pass on Hefty LA / LB Container Excess Dwell Surcharges to Shippers

Ocean Carriers to Pass on Hefty LA / LB Container Excess Dwell Surcharges to Shippers

 

As previously announced, the Ports of Los Angeles and Long Beach, under the direction of the Biden-Harris Supply Chain Disruptions Task Force, implemented a new emergency “Container Excess Dwell Fee” policy on November 1 to alleviate the severe congestion that is contributing to record delays and backlogs at the ports.  Under the new policy, ocean carriers will be charged a potentially hefty daily compounding fee for shipping containers that linger too long at the ports.

Some carriers, including Maersk / Hamburg Sud, ONE, and MSC, have already announced they will pass along the costs to shippers and importers, and industry analysts expect more to follow suit.

  • Click here to read the Maersk / Hamburg Sud news release
  • Click here to read the ONE customer advisory
  • Click here to read the MSC notice

These moves are likely to encounter some push-back from already frustrated importers, who have faced rising costs and continued supply chain delays.  Many shippers will likely refuse to pay the charges, claiming they have no control over retrieving their containers from the ports.  The Western States Trucking Association is urging the Governor of California to enforce state legislation that prevents the terminal operators and carriers from charging the excessive fees when truckers are unable to pick up loaded import boxes or return empty containers.

In the meantime, carriers are working with the terminals and the Biden Task Force to clarify the details of the new policy, including how the fees will be collected and if cargo will be released prior to collection.

 

More West Coast Terminals Follow California Ports in Imposing Long Stay Charges

Following announcements at Los Angeles and Long Beach, charges for excessive container dwell times are spreading to other terminals across the West Coast as ports try to clear backlogs.

On November 3, Matson Terminals – Long Beach issued a customer advisory announcing a new Container Dwell Surcharge, which mirrors the new surcharges announced by the Ports of Los Angeles and Long Beach.  Unlike the charge levied by the ports of LA / LB, Matson will not implement this fee on intermodal cargo at this time, although they may adjust their position if circumstances warrant.

Two marine terminal at the Port of Tacoma, Washington – Husky Terminal & Stevedoring and Tacoma’s Washington United Terminal – have also begun assessing fees on long-resting containers.  Unlike the policies in effect in Southern California, the fees are being imposed by private terminal operators instead of the port authorities, they are one-time fees that do not escalate over time, and they are assessed to cargo owners, not ocean carriers.

 

Frequently Asked Questions

  1. When will the container dwell surcharges be imposed?

The Los Angeles / Long Beach program will take effect on November 1, but penalties will not be assessed until November 15, 2021.  The fees will remain in place for 90-days

Matson Terminals will begin imposing their surcharges on December 2, 2021, and will remain in place as long as the Port of Long Beach levies their surcharge.

Husky Terminal & Stevedoring’s program began imposing the fee on importers on November 8, 2021.

Tacoma’s Washington United Terminal will begin assessing the long-term dwell fee beginning on November 15, 2021.

 

  1. How will the fees be assessed?

The container dwell surcharge will be assessed based upon the number of calendar days (including weekends and holidays) after free time

Los Angeles / Long Beach

The fee will be applied to all trucking containers that remain on the terminals for 9 days or more and 3 days or more for rail containers.  The cost is $100 per container on the first day past the dwelling limit and will increase by increments of $100 for each day the container remains on terminal.  The charts below show the depth of the new fees.

Domestic Trucking

The excess dwell fee will begin on the ninth day the container is on terminal and will be assessed as follows:

Days on Terminal Daily    Surcharge Accumulative Charge

(per Container)

Day 9 $100 $100
Day 10 $200 $300
Day 11 $300 $600
Day 12 $400 $1,000
Day 13 $500 $1,500
Day 14+ $100 per day increase with no maximum cap.

 

Rail / Intermodal

The excess dwell fee will begin the sixth day the container is on terminal and will be assessed as follows:

Days on Terminal

Daily    Surcharge

Accumulative Charge

(per Container)

Day 6

$100

$100

Day 7

$200

$300

Day 8

$300

$600

Day 9

$400

$1,000

Day 10

$500

$1,500

Day 11+

$100 per day increase with no maximum cap.

 

Matson Terminals – Long Beach

Matson’s new surcharge will be assessed on containers not picked up from its off-dock container yards after eight days as follows:

Days on Terminal

Daily    Surcharge

Accumulative Charge

(per Container)

Day 9

$100

$100

Day 10

$200

$300

Day 11

$300

$600

Day 12

$400

$1,000

Day 13

$500

$1,500

Day 14+

$100 per day increase with no maximum cap.

 

Port of Tacoma

Husky Terminal & Stevedoring

Husky will assess a one-time fee of $315 for all containers that have dwelled on the dock for more than fifteen days.

Tacoma’s Washington United Terminal

United Terminal will impose a one-time fee of $310 for all import containers that have exceed fifteen calendar days on terminal.

 

  1. Will there be a cap on the fee?

There will be no maximum cap placed on the fee.  The fee will be applied every day the container is on terminal.

 

  1. Will ports release cargo before the fee is paid?

As of now, we do not know if the Ports of Los Angeles and Long Beach will release cargo before the surcharges have been paid.

Husky Terminal & Stevedoring has announced that all fees must be paid before cargo will be released.

 

  1. Will the carriers give a 30-day notice before invoicing shippers/customers per FMC regulations?

No.  As the fee is authorized by the U.S. government, the carriers will be charged without the 30-day’s notice, and, therefore, the fee will be passed along to shippers/customers without a 30-day notice and on the same timeline as the ports have announced.

 

  1. Who will bill the container dwell surcharge and how will it be collected?

This information has not yet been communicated by the ports.

Maersk/Hamburg Sud expects either the Port Authorities will bill the carriers, who will then invoice the shipper or customer for the accumulated amount, or the terminal operator will collect the surcharge on behalf of the carriers prior to cargo release.

ONE will issue a customer invoice for the accumulated amount.

 

  1. Will the carrier file this new surcharge in my tariff?

Yes, the carrier will publish the new surcharge in its tariff.

 

  1. Does the new surcharge affect containers already on terminal or only containers discharged on or after November 1?

The charge will be applied to all shipping containers that are on terminal starting on November 15, regardless of when the container arrived.  As of November 15, all containers dwelling on terminal for more than eight days from date of discharge will be counted as nine days dwell and will continue accumulating the surcharge until removed from the terminal.

 

  1. Will the fees be assessed on weekends and holidays?

As the surcharge is based upon calendar days, the fee will be assessed inclusive of Saturdays, Sundays, and holidays.

 

  1. Will containers held for Customs Exam be exempt from the fee?

No, all shipping containers on terminal will be subject to the fee regardless of release status.

 

  1. If I have a no-new-fee clause in my service contract, will the charge apply to me?

Yes, the surcharge will still apply to you because the no-new-fee clause does not apply to government-imposed charges.

 

  1. If the terminal does not make a pickup time available, how can this fee be fairly assessed? And is there any recourse?

The carriers are working with the terminals to clarify.  ONE encourages all customers and truckers to check the terminal websites for available appointments.

 

  1. If the cargo is inaccessible at the terminal, will I still be charged the fee?

If cargo is in a “closed” or “unavailable” area, we strongly encourage customers and truckers who are unable to collect containers to follow the terminal’s “unavailable container process.”

 

  1. Will the surcharge still be applied if I am unable to pick up my container because the driver can’t get a chassis to move it off the terminal?

Yes, the fee will still be applied even if a trucker cannot find a chassis due to the chassis shortage because the carriers are not able to waive a government-mandated fee.

 

  1. Will the surcharge be applied if there is a rail delay?

Maersk / Hamburg SUD is still working with the terminals to clarify, but assumes the fee will still be applied to shippers/customers.

ONE has announced that even though the Port Authority will still impose the fee to carriers in the event of a rail delay, they will not pass along the fee to customers.

 

  1. Will the new surcharge be applicable to local Store Door (SD) moves where the carrier controls the move at a Multi Purpose Terminals (MPT)?

If the delay is caused by a line or customs hold or is subject to an exam or government inspection, the fee will still be applicable, even for MPTs.

 

  1. Are there any exemptions to the fee?

No, there are no exemptions to these fee as they are being imposed by the U.S. government.

 

  1. What can cargo owners do?

Cargo owners are encouraged to work with trade organizations and to share their thoughts with the port authorities.  Contact details for the Port of Los Angeles are here and the Port of Long Beach are here.

 

For more information on the San Pedro Bay Ports’ new surcharge, please refer to their formal announcements located at: