Officials from the Port of Long Beach and the Port of Los Angeles announced Monday they would delay issuing fees to ocean carriers for another week after seeing notable progress in clearing backlogged containers.
The fees, which were set to kick in on Monday, will be delayed until Nov. 22, officials announced. The decision comes after officials saw a 26% decline in the amount of aging cargo on the docks of both ports combined since the fee was announced Oct. 25.
“There’s been significant improvement in clearing import containers from our docks in recent weeks,” Port of Los Angeles Executive Director Gene Seroka said in a statement. “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.”
Under the temporary Container Dwell Fee policy adopted in October by the Harbor Commissions of both ports, ocean carriers will be charged each day for containers scheduled to be moved by truck that stay at the port for nine days or more and containers scheduled to be moved by rail that stay for six days or more.
The ports will charge ocean carriers $100 per container, with fines increasing in $100 increments per container per day until the container leaves the terminal. Prior to the import surge in mid-2020, containers for local delivery remained on container terminals under four days, with those transported via train dwelling less than two days, according to a news release.
This marks the second time port officials postponed the fees – they were initially set to go into effect Nov. 1, but were pushed to Nov. 15.
“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,” Port of Long Beach Executive Director Mario Cordero said in a statement. “Postponing consideration of the fee provides more time, while keeping the focus on the results we need.”
At the end of October, port officials announced that more than 100 cargo ships were simultaneously anchored off shore – an all-time high for the two locations that move about 40% of all containerized cargo entering the U.S. annually. The congestion at the ports has caused a massive backlog in the global supply chain, fueling concerns over shortages leading up to the holiday season.
In an effort to alleviate the backlog at the ports, the Biden administration announced that both the Port of Los Angeles and the Port of Long Beach would begin operating around the clock in October. In addition, the California Department of Motor Vehicles (DMV) announced last week that it was increasing the number of commercial driving tests to help alleviate the current truck driver shortage that is contributing to the port backlog.
Critics say the measures are akin to "nibbling around the edges" of a more systemic problem of red tape in the supply chain of imports coming through the two ports.
“You have a system that is brittle, inflexible and inefficient. No amount of fiddling at the edges is going to fix that," Scott Lincicome, senior fellow in economic studies with the nonprofit CATO Institute, told The Center Square in October. "It’s going to resolve itself in the coming months as demand in the U.S. wanes a bit. Pressure will be alleviated and things will be OK, but that still isn’t going to fix the store shelves before Christmas.”
To discuss the latest supply chain developments, Transportation Secretary Pete Buttigieg is scheduled to join Seroka, the executive director of the Port of Los Angeles, for a press briefing at 10 a.m. Tuesday.