Ports of Los Angeles & Long Beach Implementation of a “Container Excess Dwell Fee Import”

Source: Kuehne+Nagel

The Ports of Los Angeles and Long Beach announced their intent to implement the Container Excess Dwell fee effective November 1^st, 2021, subject to Harbour Commissioners approval. The Harbor Commissioners for both ports met this past Friday, October 29^th, 2021 and approved said fee to become effective November 1^st, 2021 with fees being assessed as of November 15^th, 2021. Following is an exert of the official announcement issued by the Port of Long Beach:

“The Harbor Commission approved a “Container Excess Dwell Fee” program that will be implemented on Nov. 1. The fee will not be assessed until November 15^th. The Port of Los Angeles’ board approved an identical measure Friday.

The ports will charge ocean carriers for each container that falls into one of two categories. For containers scheduled to move by truck, the fee applies to every container dwelling nine days or more. For containers moving by rail, the fee applies if the container has dwelled for six days or more.

The fee increases in $100 increments per container per day until the container leaves the terminal. The Port has the authority to not start charging the fee, should there be progress by November 15^th.“

The overall intent of the respective Port Authorities appears to be to incentivize cargo owners to retrieve containers that are dwelling at terminals and ultimately free up sufficient space to facilitate the discharging of the 70+ container vessels that are currently at anchor or drifting in San Pedro Bay, CA.

Based on notices received from numerous ocean carriers, it’s their intent to pass these Port/Government fees on to cargo owners, whenever assessed by the respective Port Authority. Subsequently, we will have no choice than to also pass such charges along with any possible administrative fees that may be assessed by the respective ocean carrier, to our clients as cargo owners as we’re unable to waive these charges, which are valid irrespective of any “No new charge“ clause“ that may exist as this is a Port/Govenment assessed charge.

To help you understand this new charge better, we share some Q&A’s compiled by some of the carriers:

• When will the  fee come into effect? Retroactive to November 1^st billing starts Novemver 15^th
• Does it affect containers already on the terminal (retroactive) or just containers discharging November 1^st or later? Yes it affects containers already at the terminal.
• How will the fee be assessed? $100 per container per day increasing by $100 each additional day per container.
• What is the fee structure? For IPI(rail) containers, day 7 will be $100/FCL, day 8 = $200/FCL, day 9 = $300/FCL. As example a container dwelling 3 days past the allowed 6 days free time will incur charges of $600.
• Will it be applied on calendar or working days? Calendar days including holidays.
• How will the rail delays be handled? We expect the ocean carriers to work with their terminal & rail partners to move containers timely based on rail car availability and minimize the cargo owners to additional costs wherever possible.
• Will the charge be applied to containers where the rail providers are metering the flow of freight out due to congestion at inland rail points? Yes.
• Will there be a maximum cap on the fee, or will the charge continue for the duration the container is on the terminal/rail? Based on information provided by both Port Authorities, there is no cap.
• Will containers held for customs exams be exempt? This is still to be determined.
• For containers that exceed the allowed free time (9 days for truck moves) will the charge be payable to the terminal operators or ocean carriers before cargo is released? For local truck moves, we anticipate the charge being collected to enable cargo release.
• What if I am unable to pick up my container due to lack of chassis, will the chargestill be applicable? Yes.
• Who is responsible for the fee if the container is not available by the terminal? The fee should only be charged for dwelling containers that are available for pick-up.
• If an appointment pick up time is not available, how is this fairly assessed (on a per day basis) and handled? Truckers will need to work on getting appointments even if they are night time appointments.
• For holidays scheduling, will the fee window be adjusted if the allowed free time has not been exceeded? To be determined but we expect this will be charged per calendar day.
• Will this also apply to LCL cargo and how will it be assessed? Yes, it will apply to LCL cargo also and we expect the consolidator to pro-rate applicable fees that have been incurred/paid.
• Will there be other fees applicable? We expect ocean carriers and others to also assess an “Admin fee“ to cover costs incurred to manage the payment and collection of the charges. This amount may vary from one carrier/provider to another.

Our customer service and operations teams continue to do their utmost to serve you in these very challenging times and will endeavor to keep you as fully informed as possible. In the meantime, please feel free to reach out to contact your Kuehne+Nagel representative with any questions or to find out how we can help keep your supply chain moving.