The Port of Los Angeles and Port of Long Beach once again delayed a $100 per day container dwell fee.
“That date is on hold pending further discussion with stakeholders and bringing a plan to the Harbor Commission,” Port of LA director of media relations Phillip Sanfield reportedly said.
During the height of the supply chain bottlenecks, the country’s two largest container ports were overwhelmed. Upwards of 110 cargo vessels idled off the California coast, and pressure was brought to bear to require importers to haul away containers. With backing from the White House, port officials agreed to implement a daily penalty for delayed containers. The temporary program was approved on Oct. 29.
Port officials associated with the $100 dwell fee policy appear to have employed it as a bully pulpit tool. Some indicate the threat of mounting fines prompted retailers to stop using the ports as warehouse space and move their goods and materials.
“The number of import containers on our docks is down significantly since we first announced plans for a Container Dwell Fee. The threat of a fee has helped containers lingering nine-plus days on the import side of our business by 56 percent (for the Port of LA) since this plan was announced back on October 25,” Port of LA Executive Director Gene Seroka reportedly said. “And the overall number of import containers on our docks has dropped by 39 percent during that time. I am pleased with the progress, and as I told the Harbor Commission when it approved the plan, ‘I hope we don’t have to administer any fees.’”
The daily fees were expected to penalize rail-bound containers that remained in port for six days and truck-bound cargo after nine days. Initially set to run for 90 days, officials repeatedly kicked the can down the road. Few in the trucking in logistics sector take the threat of fines seriously at this juncture.
While fines appear to have been used as the proverbial whip, port logistics personnel appear to have accounted for the fact Southern California struggled with near-zero warehousing space availability. Companies established several temporary off-port locations during the peak of the supply chain hiccup, and the ports opened badly needed land to store containers.
“To date, we have repurposed more than 130 acres of vacant land. That is an enormous amount of land we have applied to this challenge, and the idea there is very simple. Warehouse capacity is at an all-time low. The vacancy rate in the Inland Empire, which is about 60-to-70 miles from the ports, is at about 1 percent,” Port of Long Beach Deputy Executive Director and Chief Operating Officer Noel Hacegaba reportedly said. “So, in the absence of warehouse capacity, we noticed that containers were piling up in the terminal, and that was what was creating this backlog of ships. By making land available inside the port, it allowed our terminals and our shippers to push those boxes out, and it provided immediate relief to the terminals.”
The dwell fee policy was scheduled for yet another review on Feb. 4. It’s abundantly clear the theoretical fines are unlikely to be implemented any time soon, if ever.
Source: porttechnology.com, logisticsmgmt.com, freightwaves.com, hellenicshippingnews.com
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