November 2021
What the Los Angeles / Long Beach Container Excess Charges Mean for Importers
With the holidays just around the corner, along with the year coming to an end, budgets and finances are at the forefront of everyone’s minds. And, for those in the importing and exporting industries, there is a very good reason to keep them there. We’re talking about the controversial Port of Los Angeles and Port of Long Beach container excess charges.
If you’re an importer, then you’ve probably heard about these fees already. If not, then they’re something you need to familiarize yourself with as soon as possible. We’ll parse through some of the details here so that you can better understand what these charges might mean for your business. As always, we’re happy to answer any further questions that you may have.
Now let’s dive in.
Background Information About the Ports
New charges are always annoying to deal with, but they’re not always major news items. Any time that something like this pops up in the Port of Los Angeles or the Port of Long Beach, though, it’s a newsworthy event. Why Is that?
Because These are the #1 and #2 ports in North America, and part of the 9th busiest port complex in the entire world.
36% of all U.S. inbound containers, and 25% of all U.S. outbound containers pass through these ports. And that means that a whole lot of people are going to be affected by any new fees and charges that they encounter in these ports.
So, what exactly are these charges that we’re talking about?
Ocean Carrier Container Dwell Fees
In late October of this year, the Ports of Los Angeles and Long Beach approved a new container dwell fee on Ocean carriers. Basically, this means that any import containers lingering in marine terminals are going to be hit with a brand new fee that no one has had to pay before.
The goal of the new fee is simple - to keep things moving. As mentioned above, we’re talking about some seriously busy ports here. The hope is that the new fee will encourage importers to move cargo through their terminals faster. If they don’t, they’ll be hit where we all feel it most - in the wallet.
The Fee Passed with Unanimous Approval
The Container Excess Dwell Fee was put to a vote in both the Port of Los Angeles and the Port of Long Beach toward the end of October. The boards for both ports passed the new fee unanimously. This isn’t surprising, of course, considering what these ports have been dealing with over the course of the past year and a half or so.
Since the summer of 2020, congestion in the ports, and many others in similar situations, has been off the charts. That’s only getting worse as peak holiday shopping season grows nearer. When the docks get that congested, vessels aren’t berthing as quickly as they normally would. And that leaves ships sitting around waiting just off the coast - and leaves businesses and consumers waiting for their shipments, as well. Just recently, the start date of the fees was announced as December 6, 2021 since they have seen some good signs of freight movement.
Who Will Be Affected By These Fees?
There are two categories that you need to fall into in order to be affected by these fees - you either need to be moving your import containers by rail or by truck.
If you’re moving them by truck, then the fees start hitting on the 9th day of the container’s dwelling. The fee starts at $100 on the 9th day, and increases by $100 dollars for each additional day without limit. That means on the 10th day you’ll be charged an additional $200 fee, on the 11th day you’ll be charged an additional $300 fee, and so on. Those containers being moved by rail will be similarly fined, but starting on the sixth day.
What Are the Ports Hoping to Accomplish?
Yes, the goal of these fees is to keep things moving. But to what end? A lot of people will assume that efficiency is desired to boost revenue, and when that fails implementing new fees is another means to the same end. According to Los Angeles Harbor Commission President Jaime Lee, however, revenue is not really the goal.
Instead, the hope is simply to encourage “supply chain partners to make operational changes that will reduce dwell times, clear our terminals and make room for the ships waiting to enter our port.” And, considering the mess we’re seeing in terms of the global supply chain at this time, that’s a very worthwhile goal.
Get Your Logistics Sorted to Avoid New Dwelling Fees
Regardless of where you fall on these new fees, and what you think of the motivation behind them, you need to do whatever you can to avoid racking up some serious costs. There’s no limit on what you might be charged here, and the only way to minimize any expense on your end is with a rock-solid plan for making your importing smooth sailing. Reach out JF Moran to learn how you can do that.