POLA and POLB announce plan to put off Container Dwell Fee consideration until later in November

Late yesterday, the Port of Los Angeles (POLA) and the Port of Long Beach (POLB), whom collectively account for roughly 40% of United States-bound import volumes, said they will delay the consideration of their Container Dwell Fee, for ocean carriers, until November 22.

In late October, the ports announced they would start assessing surcharges to ocean carriers for import containers dwelling on marine terminals, as part of an effort to clear out the significant backlog at the ports.

As previously reported, the ports said that, as per this policy, they will charge ocean carriers for each container falling into two categories:

• for containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more; and
• for containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more

And beginning November 1, POLA and POLB said that ocean carriers with cargo in either of these categories would be charged $100 per container, which will increase in $100 increments per container per day. The ports said that the fees collected from this initiative will be reinvested for programs to enhance efficiency, accelerate cargo velocity, and also address congestion impacts throughout San Pedro Bay.

These fees were subsequently approved by the Harbor Commissions of both ports on October 29.

Fast-forward less than three weeks later, POLA and POLB said on November 15 that they are now delaying the consideration of the Container Dwell Fee until November 22, due to what port leadership described as an improving situation.

“We’re encouraged by the progress our supply chain partners have made in helping our terminals shed long-dwelling import containers,” said Port of Long Beach Executive Director Mario Cordero, in a statement. “Clearly, everyone is working together to speed the movement of cargo and reduce the backlog of ships off the coast as quickly as possible. Postponing consideration of the fee provides more time, while keeping the focus on the results we need.”

And POLA Executive Director Gene Seroka said in the same statement that there has been significant improvement in clearing import containers from our docks in recent weeks.  

“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,” said Seroka. “We will continue to closely monitor the data as we approach November 22.”

POLA and POLB officials said that prior to the mid-2020 pandemic-driven run-up in imports, containers for local delivery, on average, were on container terminals for less than four days, with containers destined for trains dwelled for less than two days.

This is not the first time POLA and POLB have partnered up in recent weeks.

In mid-September, they said that each port will expand its hours in which trucks pick up and return containers, with POLB to maximize its nighttime operations, and POLA to expand weekend operating gate hours.

POLA’s initiative, which it labeled “Accelerate Cargo LA,” will operate on a pilot basis, according to Seroka, focusing on ensuring gate availability meets cargo demands and also provides greater transparency to improve efficiency.

What’s more, both ports said they have called on maritime terminal operators, in an effort to “incentivize the use of all available gate hours,” with a focus on available night gate hours,” in an effort to reduce congestion and maximize cargo throughput capacity, too.  

On a media conference call on September 15, POLA’s Seroka said compared to August 2020, which was a record month for the port, August 2021 welcomed 84 container vessels at berth, including 11 extra loaders, with 26 vessels at anchor at the end of August, including some of the new entrants with smaller ships.

And in mid-October, the White House met with United States-based business leaders, port leaders, and union leaders to focus on the challenges U.S.-based ports are facing, in addition to what each stakeholder group can do address various supply chain issues.

One of the key themes of that meeting was augmenting supply chain throughput and moving goods more quickly, and also to augment supply chain resiliency. A key cornerstone of this, it said, is shifting to 24/7 operations at the Ports of Los Angeles (POLA) and POLB), whom collectively account for roughly 40% of U.S.-bound import containers and are on track to set new annual highs in 2021.

While POLB transitioned to 24/7 operations in mid-September, POLA is now doing the same, bringing on off-peak night time shifts and weekend hours, which the White House said is expected to double the number of hours cargo can move off of POLA docks and onto the roads to reach final destinations. What’s more, it added that the International Longshore and Warehouse Union (ILWU) has stated its membership are committed to working extra shifts, which will provide the needed capacity in order to clear existing backlogs.