New Empty Container Fee from US Ports

The US ports and the White House are planning to introduce a new empty container fee for long-dwelling. Hence, allowing to tackle the thriving supply chain crisis.

Specifically, the ports of Los Angeles and Long Beach announced a new containers fee.

Concept

Particularly, the Port of Los Angeles plans to begin charging a container fee to ocean carriers. Applying on empty containers lingering on the terminals for 9 days or longer. Therefore, the fee is subject to approval by the Los Angeles Harbor Commission, taking effect on 30 January 2022.

Empty Container Fee

Under the policy, ocean carriers will have to submit $100 for an empty container dwelling for 9 days. increasing in $100 increments per container per day until the container leaves the terminal.

The Los Angeles Harbor Commission will consider the program at its board meeting on 13 January.

“While we have seen significant success reducing import containers on our docks the past 2 months, too many empty containers are currently sitting on marine terminals… Just like the import dwell fee; the objective with this empty container program is not to collect fees but to free up valuable space on our docks. Clearing the way for more ships and improving fluidity”

Gene Seroka, executive director, Port of Los Angeles

Container Dwell Fee

Note that, the port announced a similar program on 25 October 2021 for lingering import containers. However, this caused a decline of 54% in ageing cargo on the docks. Thus, the port delayed enacting the fee which is on hold until 10 January.

Ocean carriers can be charged for each import container that falls into one of two categories; If scheduled to move by a truck there will be a fee for every container dwelling 9 days or more. For containers moving by rail, the fee applies if dwelled for 6 days or more.

Contribution

The policy was a development in coordination with the Biden-Harris Supply Chain Disruptions Task Force, US Department of Transportation, Port of Los Angeles and multiple supply chain stakeholders. 

The legislation, known as the Bipartisan Infrastructure Deal,  plans to invest $17 billion to upgrade ports, strengthen supply chains and reduce costs, cut emissions and drive electrification and other low-carbon technologies.

Associated Incentives

At the beginning of December 2021, CMA CGM (shipping and logistics) also implemented the Early Container Pickup incentive program. It is scheduled to last for 90 days.

The incentive is provided to the importers that pick up their container via merchant haulage from all the terminals in Los Angeles and Long Beach in the first 8 days. Therefore, using it to offset costs incurred by tensions on their supply chains.

Explicitly, it includes $100 per container for daytime pickup from Monday to Friday. While $200 per container at night and on weekends.

Nerd Thoughts

The above measures to tackle the thriving supply chain crisis have already reduced the lingering of containers at terminals. That is before even enforcing the corresponding fees.

Nevertheless, it is a great opportunity for operators to utilize the concept of the folding container. Hence, by minimizing the empty container space to 1/5, the applying dwell fees may be divided accordingly.

Source: Port of LA