The ports of Los Angeles and Long Beach on Friday, April 22, once again delayed implementing a fee against ocean carriers whose import containers linger at marine terminals, even as progress in reducing the backlog has slowed in recent weeks.
The pilot program launched in early November as the twin ports, the two busiest in the nation, struggled with an ongoing cargo surge amid the pandemic. The supply chain, which officials had long worried was vulnerable, essentially broke down, causing containers to pile up at the ports.
The Container Dwell Fee was one of several solutions to reduce that backlog. The program was initially set to last 90 days, but the LA and Long Beach harbor commissions extended it until April 29. That first extension ends next week — but the ports are poised to extend it to July 28. The LA harbor commission OK’d a second extension last week, and Long Beach’s harbor commission will vote to do the same on Monday, April 25.
Despite those extensions, the ports have not yet begun charging the fee.
Instead, the ports have repeatedly delayed implementing it.
The fee, announced on Oct. 25, was initially supposed to go into effect Nov. 1. But the ports postponed that until Nov. 15 to give ocean carriers time to comply. When Nov. 15 came, however, the ports delayed the fee by one week, to Nov. 22.
The ports have delayed the fee every week since — citing voluntary progress as the reason.
The ports, for example, announced on Friday that aging cargo — containers that stay on terminals for at least nine days — had declined a combined 49% since the fee was announced.
The number of aging containers did, in fact, decrease continually for weeks. Until recently.
The 49% decline overall marked an improvement from last week, when the ports reported a 42% drop overall.
But before that, the ports had seen multiple weeks where that improvement had reversed.
The ports on April 8 reported a 49% decline — same as this week — and the week before, they said aging cargo had dropped 56%. On March 25, it was 57%.
The trend was worrying enough that Mario Cordero, the executive director of the Port of Long Beach, suggested last week that the fee could go into effect in there wasn’t a turnaround.
“We’re seeing a turnaround not for the better,” Cordero said, “and both ports now are looking at this to see if in a couple weeks we will impose a fee. The hope is that we won’t, but looking at those numbers it’s concerning, and we can’t afford to go back to where we were last fall.”
The bulk of the improvement this week, based on data from both ports, seems to have come from Long Beach.
The reduction in aging containers, since late October, improved from 42% on April 15 to 53% on Friday at the Long Beach port. The LA port, though, only saw a three percentage-point improvement, from 46% to 49%.
The Port of Long Beach had 12,350 containers on Friday that had idled on docks for at least nine days. The Port of Los Angeles had 19,134 containers that met that threshold.
Still, the overall decline in aging cargo reported Friday was an improvement from last week — the first such improvement in about a month.
And so the ports held off on implementing the fee for another week. The earliest it could go into effect would be Friday, April 29.
If the ports do eventually decide the levy the fee, ocean carriers would face a potentially heavy financial cost. Under the program, the ports would charge ocean carriers $100 a day for every import container that stays on the docks for at least nine days. The fee would increase by $100 a day.
The ports would reinvest that money into programs further reduce congestion, officials say.
Source~ Daily Breeze