The Ports of Los Angeles and Long Bay have announced a last minute reprieve on the highly controversial Container Excess Dwell Fee, backed by the Biden Administration.
The ports announced yesterday that they will delay consideration of the fee until November 22, citing a 26% reduction in long-dwelling containers since the policy was announced in late October.
“There’s been significant improvement in clearing import containers from our docks in recent weeks,” said Gene Seroka, Executive Director at the Port of Los Angeles. “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. We will continue to closely monitor the data as we approach November 22.”
On Monday, the ports were scheduled to begin charging ocean carriers $100 per import container for boxes that linger too long at the port. The fee was scheduled to increase $100 a day until the container is removed from the property.
Another reason the ports may have backed down on implementing the fee is the political backlash, especially after carriers announced plans to pass along the fee to beneficial cargo owners (BCOs).
In a letter to the Federal Maritime Commission, 85 business associations, including the National Retail Federation, warned that the new fee, if implemented, would “add substantial costs to the supply chain” due to “ongoing challenges that many cargo owners and drayage trucking companies are experiencing with the ability to retrieve cargo because of port congestion, restrictive empty return policies, and subsequent chassis shortages that result.”
At the National Shippers Advisory Council meeting on October 27, council members, including heaving hitters like Amazon, Walmart, Target, and Ikea, warned of “catastrophic fallout from the crazy port fees,” which would likely “cause even more problems than it’s going to solve,” especially in light of the chassis and driver shortages.
While the backlog of containers at Los Angeles and Long Beach has reduced significantly, cargo continues to flood into the San Pedro Bay. On Friday a record-setting 111 containerships were waiting to berth, with average wait times increasing to 16.9 days.