Wednesday, November 30, 2022
HomeHeadlinesLos Angeles/Long Beach ports delay dwelling fees

Los Angeles/Long Beach ports delay dwelling fees

The Ports of Los Angeles and Long Beach in Southern California delayed imposing escalating new fees for containerized cargoes that dwell too long in terminals to Nov. 22 from Nov. 15 despite a queue that has grown to a record of 87 ships waiting to berth at the dual ports.

As part of a 90-day policy led by the Biden-Harris Supply Chain Disruptions Task Force, the ports began assessing the dwell times of loaded import containers Nov. 1. Cargoes that exceed eight days in the container yard awaiting truck haulage or five days on-dock rail units will be assessed a Container Excess Dwell Fee of $100/day per container, increasing by increments of $100/d until the container leaves the terminal.

According to the Port of Los Angeles, there were 8,392 containers dwelling at the port for nine to 12 days as of Nov. 15, and 20,857 boxes that have been dwelling in terminals for 13 or more days. But aging cargoes at the Ports of Los Angeles and Long Beach have declined 26% since the new fees were announced Oct. 25, leading the two adjacent Southern California ports to extend the grace period for the new fees by another week to give shippers and carriers more time to remove their cargoes.

“We’re encouraged by the progress our supply chain partners have made in helping our terminals shed long-dwelling import containers. Clearly, everyone is working together to speed the movement of cargo and reduce the backlog of ships off the coast as quickly as possible,” said Port of Long Beach Executive Director Mario Cordero. “Postponing consideration of the fee provides more time while keeping the focus on the results we need.”

A loaded import container that remained in terminal yards since Nov. 1 and left after 3 am Nov. 15 would have been billed $2,800 in penalties, which all major carriers have announced would be passed on to shippers directly in surcharges, regardless of whether a truck chassis was available to remove the cargo or if the shipper’s contract contained a “no-new surcharge clause,” which would not apply to government-imposed fees.

“Our objective with this program is not to generate revenue,” Los Angeles Harbor Commission President Jaime Lee said in announcing the new policy Oct. 29. “Instead, we need our 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.”

The queue of ships at anchor or drifting in the San Pedro Bay waiting to berth at Los Angeles/Long Beach terminals surpassed 80 ships for the first time Nov. 9 and set a new record of 87 ships Nov. 15, according to cFlow, Platts trade flow software. A previous surge in traffic to the ports rose to more than 40 ships in February before easing in the summer, while there was seldom any ship queue at all prior to the pandemic lockdown-fueled import boom that began in mid-2020.

When the ship queue was up to 73 Nov. 3, Port of Los Angeles Executive Director Gene Seroka said 50 of those vessels were new entrants to the trans-Pacific trade lanes in the sub-10,000 TEU capacity class and did not have advance bookings at Los Angeles/Long Beach terminals. These ships, some of which were chartered by major importers such as Home Depot and Walmart, were waiting weeks or months in some cases for space to open up at the terminals.

Other new entrants to the trans-Pacific eastbound market previously operated intra-Asia feeder or cabotage services and were attracted to the trans-Pacific trade by rates that ballooned to more than $15,000/FEU for North Asia to US West Coast shipments in August-September, although these premium rates have since eased to around $10,000-$12,000/FEU on the spot market.

The Biden administration in October called for the Ports of Los Angeles and Long Beach to operate on a 24/7 basis to reduce supply chain disruptions. The Port of Los Angeles said it has been working with stakeholders to move toward night operations, but the Port of Long Beach has since ended a pilot program of night gate hours that began in September because warehouses in the area were not also operating at night, which prevented trucks from unloading and returning their chassis to the port outside normal business hours.

But there were also signs that US import volumes were at least temporarily easing as most pre-holiday cargoes have shipped and many Chinese factories were operating at about 60-70% capacity due to power and labor shortages, which could take some pressure off Los Angeles/Long Beach throughput capacity. The Port of Los Angeles is forecasting import volumes in the week of Nov. 21-27 to drop 41.1% to 104,394 from 177,300 TEUs in the week of Nov. 14-20.

The Port of Tacoma’s Husky and Washington United terminals similarly announced in early November one-off long term dwell fees of $315 and $310, respectively, for loaded containers that sit in the terminals for more than 15 days, in addition to late fees of $230/d for cargoes that dwell more than four days.

Platts Container Rate 13 — an assessment of Freight All Kinds base rates from North Asia to West Coast North America — dropped by $150/FEU to $8,350/FEU Nov. 12, the lowest rate since Aug. 31 as export volumes from Asia slowed and more carrying capacity from China became available on the spot market.

Source: Platts

Related Posts


Finance & Economy
Shipping News

Golden Ocean launches $100m stock buyback

The Board of Directors of Golden Ocean has on October 4, 2022, authorized a share buy-back program of maximum USD 100 million to purchase...

Diana Shipping Signs Term Loan Facility With Nordea Bank

Diana Shipping Inc. (NYSE: DSX), (the “Company”), a global shipping company specializing in the ownership and bareboat charter-in of dry bulk vessels, announced that...

Rival of Matson can proceed with antitrust lawsuit

Two Matson Inc subsidiaries must face claims from rival container shipping company American President Lines LLC that Matson is abusing its market power over...

Major Shareholders Raise Offer for Seaspan Takeover

A consortium led by former Berkshire Hathaway Inc. executive David Sokol and Canadian investment group Fairfax Financial Holdings Ltd raised its offer to buy...

2020 Bulkers: Conversion of index-linked charter hire for Bulk Sao Paulo

2020 Bulkers has converted the index-linked charter for Bulk Sao Paulo into fixed rate charter at US$16,146 per day, gross, for the period from...

Cyprus: Green light for one-stop-shop in shipping sector

The Parliament of Cyprus this week unanimously approved the creation of a one-stop-shop framework...

Cyprus: Green light for one-stop-shop in shipping sector

The Parliament of Cyprus this week unanimously approved the creation of a one-stop-shop framework...

Norway limits access for Russian fishing trawlers in security push

Norway said on Thursday it would impose limits on Russian fishing vessels using its...

Stolt-Nielsen: Net profit continues to improve in third quarter

Stolt-Nielsen Limited yesterday reported unaudited results for the third quarter and first nine months...

Capesize drop snaps Baltic Index’s 4-session winning run

The Baltic Exchange’s main sea freight index (.BADI), tracking rates for ships carrying dry...

Los Angeles: Unprecedented Year Increases Port Emissions

Emissions from port-related sources increased in 2021 compared to the previous year, according to the Port of Los Angeles’ latest Inventory of Air Emissions....

Los Angeles: Unprecedented Year Increases Port Emissions

Emissions from port-related sources increased in 2021 compared to the previous year, according to the Port of Los Angeles’ latest Inventory of Air Emissions....

Greece names preferred investor for Igoumenitsa port

Greece's privatisations agency on Thursday named an Italian-led consortium as preferred bidder in the sale of a majority stake in the port of Igoumenitsa....

Piraeus Port posts all-time record in revenue & profitability

Piraeus Port Authority (PPA) S.A. reported 29.3% turnover increase for the first half of 2022, amounting to 93.1 million euros compared to 72.0 million...

Hapag-Lloyd AG acquires terminal business of SM SAAM S.A.

Hapag-Lloyd AG and SM SAAM S.A. signed a binding agreement under which Hapag-Lloyd will acquire 100 % of the shares of SAAM Ports S.A....