Charges for excessive container dwell times on docks are spreading on
the US west coast, as ports and operators try to restore some fluidity
to congested facilities.
Following announcements of levies at Los Angeles and Long Beach, the
practice is now coming into play at Tacoma, with one forwarder expecting
carriers to pass on charges and customers will refuse to pay them –
leaving forwarders between a rock and a hard place.
The port’s Husky terminal will not release containers that have been
on the premises for more than 15 days until importers pay a one-time
charge of $315. And from 15 November, customers of the Washington United
Terminal face a long-term dwell fee of $310 for containers at the
terminal for more than 15 days.
These are one-off charges on top of late fees of $230 a day that kick
in once a container has been at a terminal more than four days.
Tacoma has been struggling with worsening congestion – on Friday more
than 15 ships were waiting for berth space, and in its notice to
customers about the new charge, Husky Terminal pointed out that dwell
time had grown exponentially in recent months.
The Northwest Seaport Alliance (comprising the ports of Tacoma and
Washington) has opened three temporary container storage yards near
docks this year, which has brought some relief, but not enough to halt
the worsening congestion.
At Los Angeles, executive director Gene Seroka called the charges ‘a
last resort’. He appealed to large importers especially to clear
containers from the docks, as stuck at the port they could have dire
consequences, particularly for small companies.
However, there are notable differences between the charging policies
in California and Washington state. Whereas those at Tacoma are one-off
fees, charges at LA and LB rise in increments of $100 every day over the
15-day mark.
And in California, it is the port authorities that levy the fees, not
individual terminals, and the charges are levied on shipping lines,
whereas the terminals in Tacoma charge importers.
Craig Grossgart, SVP global ocean at Seko Logistics, said there was
never any doubt the carriers would pass on the charges by the California
ports. But, he added: “Carriers are not going to absorb them.”
He said carriers did not want to assume liability for the entire journey of a shipment, even if they had to-door products.
This leaves forwarders in a tight spot. Mr Grossgart expects many
shippers to refuse to pay their agents for these charges, claiming they
have no control over retrieving containers from the ports.
By his estimate, about 5% of the containers sitting at the ports for
long periods have been parked there by importers without the storage
capacity to accommodate them, whereas over 90% of these boxes cannot be
retrieved by importers.
According to the port of Los Angeles, the number of long-dwelling
containers there fell 19% within a week of the plans for charges being
announced.
Meanwhile, importers are also facing higher costs for containers
stuck at rail yard and ramps. At the beginning of December, Norfolk
Southern will cut free dwell time for importers at 27 second-tier rail
ramps. From then on, importers have just the day they receive
notification that the container is available, plus one more day, to
collect it without incurring charges.
In addition, the rail carrier is raising demurrage fees in those 27
locations and will charge $200 on the first day beyond the limit, and
$215 for each additional day.
Norfolk Southern wants to avoid congestion of containers spreading
from its tier-one facilities to tier-two markets. Normally these are not
congested, but now boxes are piling up even at tier-three and tier-four
ramps, said Mr Grossgart.
These moves may encounter some push-back from frustrated importers
and other parties facing higher charges. The Western States Trucking
Association has written a letter to the governor of California urging
him to enforce state legislation to prevent terminal operators and ocean
carriers from charging excessive container and equipment fees when
truckers are unable to return empty containers and pick up loaded import
boxes.
The industry group argues in its letter that terminals and carriers
are “profiting from the supply chain crisis”. It’s a sentiment many
importers will share.