Market Updates

Ports of LA and Long Beach Postpone Container Dwell Fee Again

San Pedro Bay ports postpone Container Dwell Fee again

UPDATE 1/3: The Port of Long Beach and Port of Los Angeles announced they will delay consideration of the “Container Dwell Fee” directed at ocean carriers until Jan. 1.

Previous updates: 12/27, 12/20, 12/13, 12/6, 11/29, 11/22, 11/15, 10/25...

Update 1/3: Ports of Los Angeles and Long Beach keep Container Dwell Fee on hold

The holidays slowed the progress at the ports, but they have still seen a decline of 35% in aging cargo on the docks, and the port executive directors have decided to postpone the fee once more, this time until Jan. 10.

 

Update 12/13: Container Dwell Fee remains on hold

The Container Dwell Fee has been put on hold once more, now until Dec 20. San Pedro Bay ports have seen continued improvement in cargo being moved from the terminals. The amount of long-dwelling cargo at both ports combined has dropped 47% since the fee was originally announced.

However, the line of ships waiting to berth does not seem to be slowing down, rather moving farther out to sea. Splash247 reported a whopping 101 ships waiting for their turn at the California ports.

 

Update 12/6: Postponed Again - Container Dwell Fee remains on hold

On Dec. 6, the Port of Long Beach and the Port of Los Angeles announced they would hold off on the "Container Dwell Fee" for another week. The ports reported a combined decline of 37% in aging cargo on the docks.

 

Update 11/22: San Pedro Bay ports postpone Container Dwell Fee again

According to a Nov. 22 update from the Port of Long Beach, the Container Dwell Fee has again been put on hold, this time until Nov. 29 after the ports of Los Angeles and Long Beach have seen continued improvement in cargo being moved from the terminals. The amount of long-dwelling cargo on the docks has dropped 33% since the fee was originally announced, so it appears the mere threat of the fee is having it's desired effect. 

 

Update 11/15: Improvement in clearing import containers prompts LA/LB port authorities to postpone "container dwell fee" another week

On Nov. 15, the San Pedro Bay ports have agreed to postpone consideration of the "container dwell fee" until Nov. 22. The ports have seen a decline of 26% combined in aging cargo on the docks since the fee was announced on Oct. 29.

The delay of the fee is a good sign for importers — it is a signal that the backlog of cargo at the ports is being cleared and means more room for incoming freight. 

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

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

We will continue to monitor this situation and provide updates as more information becomes available.

 

Update 10/29: Harbor Commission approves Container Dwell fee, gives grace period before implementation

On Friday, Oct. 29, Harbor Commissioners for both Long Beach and Los Angeles unanimously approved the controversial "Container Excess Dwell Fee", also called the "PSW Emergency Fee". The fee went into effect on Nov. 1, however, it was announced that penalties would not be assessed until effective Nov. 15. This two-week grace period was been given to allow shippers the appropriate time to clear the docks. Should material progress be made, it is at the discretion of the Port Executive Director to extend that effective fee assessment date even further. We will continue to monitor this situation and post additional updates as they come out.

“This is the nation’s leading cargo gateway, and this crisis has national impacts. We need to take action to facilitate the rapid movement of cargo through the supply chain, and this plan will help,” said Port of Long Beach Executive Director Mario Cordero. “Combined with our push for expanded hours of operation, more space for containers and other measures, we are determined to eliminate the backlog.”

“Starting Monday (Nov 1), we will be taking daily data snapshots of how long import containers sit on our container terminals,” said Port of Los Angeles Executive Director Gene Seroka, “If progress is being made clearing our docks, I have the discretion to delay the start of fees.

"Our goal is to see significant improvement on our docks so that we don’t need to administer any fees,” he said.  

The fees, of which the ports of Los Angeles and Long Beach will be responsible for collecting, will be reinvested into port infrastructure improvements to increase efficiency, speed cargo flow, and lessen port congestion. This policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.

According to a report from Lori-Ann LaRocco from FreightWaves, combined, the ports of Los Angeles and Long Beach have nearly 60,000 containers considered to be "long-dwelling", however, the fees do seem to be having their desired deterrent effect: 10% of the Port of Long Beach's 27,000 lingering containers have been moved out since last Wednesday.

We could see carriers limit or stop accepting IPI cargoes via LAX/LGB to avoid the fee.

If you are concerned that any of your containers which are moving by truck may be at risk of incurring these fees, we urge you to make the pick up with your trucker and arrange pre-clearance as soon as possible. If you have containers moving by rail that may be at risk of incurring these fees, it may be beneficial to change the routing via Pacific Northwest (PNW), East Coast (EC) or ship to base ports only.

Let us know if we can help you assess your options to find the one that works best for your business: Contact Us.

 

Ports of LA, Long Beach Announce New Measure to Clear Cargo Backlog

On Oct. 25, officials at the California Ports of Los Angeles and Long Beach announced a new measure to help clear cargo and congestion amid a deluge of import containers overwhelming the complex. The San Pedro Bay ports have recently made major headlines due to extensive ship queues of up to 70+ ships floating off the coast waiting to berth, and even attracted the attention of President Biden, who penned an Executive Order this month to address the issue.

"Under the new policy, the ports will charge ocean carriers for each container that falls into one of two categories. In the case of containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more. For containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more.

Beginning Nov. 1, the ports will charge ocean carriers with cargo in those two categories $100 per container, increasing in $100 increments per container per day," the official Press Release from the Port of Long Beach outlined

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

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

According to the announcement, the policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.

We are keeping an eye on this situation and will continue to keep you informed as more details are released.  If you have any questions, comments, or concerns regarding this announcement, please contact your local UWL Representative and we will be happy to help you. 

 

LA/LB Container Dwell Fee FAQ

What is the "Container Dwell Fee"?

On Oct. 29, Harbor Commissioners for Long Beach and Los Angeles approved a "Container Excess Dwell Fee", also called the "PSW Emergency Fee" to incentivize the movement of import containers from congested terminals.

The surcharge technically went into effect on Nov. 1, however, the effective date has been several times delayed. Penalties will be assessed at the discretion of the Port Executive Directors, and we could see them extend that date even further as progress continues. 

The ports will charge ocean carriers $100 per container for each container that falls into one of two categories:

  • For containers scheduled to move by truck, the fee applies to every container dwelling nine days or more.

  • For containers moving by rail, the fee applies if the container has dwelled for six days or more.
The fee increases in $100 increments per container per day until the container leaves the terminal.

According to the announcement, the ports of Los Angeles and Long Beach are responsible for collecting the fees, and the money will be reinvested into port infrastructure improvements to increase efficiency, speed cargo flow, and lessen port congestion.

This policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.

If you have any concerns related to this fee, please reach out to your local UWL rep: Contact Us.

 

LA/LB "CONTAINER EXCESS DWELL FEE" FREQUENTLY ASKED QUESTIONS

1. When do fees begin to accrue?
The fee will be applied to all containers that remain at the terminal for NINE (9) days or more if they are scheduled to be moved by truck. The fee will be applied to all containers that remain at the terminal for SIX (6) days or more if they are scheduled to be moved by rail. The charges will accrue on the 9th day and 6th day respectively.

2. What is the fee structure?
The fee is $100 per container for the first day past the set dwelling limit for the terminal or rail, increasing in $100 increments per container per day (e.g., $200 for day 2, $300 for day 3 and so on). IMPORTANT: The "Container Excess Dwell Fee" will be assessed in addition to any previously published demurrage charges.

Container Excess Dwell Fee (In calendar days)

Days Fee Amount ($) Running Total ($)
0-8 $0 $0
9

$100

$100
10 $200 $300
11 $300 $600
12 $400 $1000
13 $500 $1,500
14 $600 $2,100
15 $700 $2,800
16 $800 $3,600
17 $900 $4,500
18 $1000 $5,500
19 $1,100 $6,600
20 $1,200 $7,800
Each day beyond that +$100 from previous day Compounded running total after each day

 

3. Will the fee apply on calendar days or working days?
The fee will be applied based on calendar days, inclusive of Saturdays, Sundays, and holidays.

4. When will the fee go into effect?
The fee is effective on November 1, but the fee will not be assessed until announced by the directors of ports of Los Angeles and Long Beach.

5. What containers are subject to the fee?
To the best of our knowledge, containers that are on the terminals that exceed either the 9-day or 6-day periods shall be subject to the fee regardless of the containers’ discharge date.

6. Is there a maximum cap on the fee?
There is no maximum cap on the fee.

7. Are containers held by Customs for examination exempt from the fee?
We expect all containers will be subject to the fee irrespective of release status.

8. Who will bill the fee and how will it be collected?
We expect the port authorities to bill the Carrier for the fee. The fee will be collected from the customer by either Carrier’s direct invoice to the customer, or by the terminal operator who will act on behalf of the Carrier.

9. Will the fee apply to containers that are delayed loading onto the rail?
To the best of our knowledge, the Port of Los Angeles and Port of Long Beach will continue to assess the fee on containers that are delayed loading onto the rail.

10. Will the charge apply to containers where the rail providers are metering the flow of freight out due to congestion at inland rail points?
To the best of our knowledge, the Port of Los Angeles and Port of Long Beach will continue to assess the fee on containers not accepted by the rail due to congestion at inland rail points.

11. Will the Carrier be required to provide 30-days prior notice for the new fee?
Carrier will publish the new surcharge in its tariff which will be effective immediately upon publication.

 

We will continue to monitor this situation and post additional updates as they come out. Please contact your local UWL Representative with any questions you may have. You can also reach us on our website here: Contact Us

 

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