Ports of Los Angeles & Lengthy Seaside Delay Charges Once more – Completely satisfied Thanksgiving!
The Ports of Los Angeles and Lengthy Seaside appear comfortable to maintain dangling the specter of extremely excessive container dwell charges to induce motion of import transport containers out of the ports’ terminals.
On Monday (November twenty second), when the brand new however momentary charges have been supposed to enter impact, the Port of Los Angeles put out a press launch saying the charges are on maintain till November twenty ninth.
That’s a cheerful Thanksgiving present for shippers. Whereas these charges are technically positioned on transport strains, these ocean freight carriers plan to cross the charges on to shippers. The charges are steep too. They begin at $100 per transport container. Every day, the payment will increase by one other $100 and is added to the quantity already owed. The cumulative impact is a quickly rising payment that might get out of hand quick.
The next chart exhibits how large the threatened charges are, beginning at day 9 when they’re purported to take impact, and what the cumulative cost per container could be if failure to maneuver the cargo occurred:
For transport containers ready for rail fairly than truck to get them out of port terminals, these charges would start after solely 6 days as an alternative of 9.
That is the second time these charges have been postponed. We simply blogged final week about them being delayed the primary time.
The apparent level is to scare shippers and carriers into getting cargo containers out of the ports earlier than they should pay these exorbitant quantities. If transport containers transfer effectively sufficient, although no actual quantity of transport containers cleared has been given, that might fulfill the ports sufficient to maintain from implementing this payment hike.
Apparently, it’s working. The Port of Los Angeles stated in its press launch that getting older cargo on the docks have declined by 33% because the this large dwell payment was introduced.
After all, correlation doesn’t essentially imply causation. Nonetheless, it could be awfully coincidental to say the 2 weren’t associated. As a result of there are different components at play to scale back dwelling containers on the docks and port congestion generally, it wouldn’t be as coincidental as saying a novel coronavirus outbreak hitting a metropolis had nothing to do with the truth that metropolis simply occurred to have a virology lab doing achieve of operate analysis on coronaviruses. Nonetheless, the connection could be onerous to disclaim. Definitely, nobody can be labeled a conspiracy theorist for going together with the connection between the payment risk and the motion of containers.
A second postponement of this payment does give hope that it’s going to not be applied in any respect. Right here at Common Cargo, we’ll be holding an in depth eye on it.
Right here’s the complete textual content of the Port of Los Angeles’s press launch:
San Pedro Bay Ports Cite Continued Enhancements on Marine Terminals
SAN PEDRO, Calif. — Nov. 22, 2021 — Following conferences right this moment with U.S. Port Envoy John Porcari and trade stakeholders, the Port of Los Angeles and the Port of Lengthy Seaside introduced additional postponement of the “Container Dwell Charge.” With continued progress shifting containers off marine terminals, the payment won’t be thought of earlier than Nov. 29.
Because the payment was introduced on Oct. 25, the dual ports have seen a decline of 33% mixed in getting older cargo on the docks. The manager administrators of each ports are happy with the progress up to now and can reassess payment implementation after one other week of monitoring information.
Underneath the momentary coverage authorized Oct. 29 by the Harbor Commissions of each ports, ocean carriers might be charged for every import container that falls into one in every of two classes: Within the case of containers scheduled to maneuver by truck, ocean carriers may very well be charged for each container dwelling 9 days or extra. For containers shifting by rail, ocean carriers may very well be charged if a container has dwelled for six days or extra.
The ports plan to cost ocean carriers in these two classes $100 per container, rising in $100 increments per container per day till the container leaves the terminal.
Earlier than the pandemic-induced import surge started in mid-2020, on common, containers for native supply remained on container terminals underneath 4 days, whereas containers destined for trains dwelled lower than two days.
Any charges collected from dwelling cargo can be reinvested for packages designed to reinforce effectivity, speed up cargo velocity and tackle congestion impacts.
The coverage was developed in coordination with the Biden-Harris Provide Chain Disruptions Job Drive, U.S. Division of Transportation and a number of provide chain stakeholders.
