The Ports of Los Angeles and Long Beach approved container fines after the White House applied pressure. But Joe Biden’s urging to level $100 per day penalties on containers that struggle to move due to supply chain hiccups will inevitably be paid by consumers.
The complex supply chain logjams that left more than 80 cargo ships anchored off the coast cannot be fixed by fines. Part of the backlog stems from wholesalers and retailers delaying container pickups. Some are essentially using ports as temporary storage. Port of Los Angeles Executive Director Gene Seroka used diplomacy at a recent Harbor Commission meeting, asking companies to remove containers.
“There is no finger-pointing. If you don’t need your cargo, let’s set it aside for now. Let’s put it somewhere else, so we can get after the cargo that has to get to market for the holiday season, the ventilators that are on containers that have to get to our medical and hospital networks, and the parts and components that head to American manufacturers and factories,” Seroka reportedly said. “My stomach has been in knots since we came up with this thing.”
Seroka reportedly went on the record, sympathizing with small businesses whose products are buried under rows of containers. They will suffer fines that could reach into the thousands while others are being cleared away. By that same token, unless big corporations have truckers move their loads, small business owners could miss their holiday sales windows.
“There are hundreds of stories like this, and that’s why we need to free up this space. It’s going to help the little guy who imports, maybe, 10 containers a year, and the next four weeks is going to make or break his payroll in a third-generation family-owned business,” Seroka reportedly said. “That’s the type of person I’m trying to get after with a policy like this.”
While the Sampson versus Goliath narrative may play well for the public, not every importer has the space to house containers before big sales days such as Black Friday arrive. In previous years, companies could pick up containers and place the goods in short-term storage. Unfortunately, Southern California warehouses have reportedly hit total capacity and national space stands below 4 percent availability.
The harsh reality is that proactive measures were not taken to deal with the record-setting imports along the West Coast as economies rebooted. The fines start at $100 per day for boxes sitting nine or more days that move by truck. Rail transport containers will only have a six-day grace period. An estimated 38,000 containers had been delayed by nine or more days at Port of Los Angeles when the fines went into effect on Nov. 1. Fines that could result in thousands per container will only add to the rising inflation.