May 24, 2022 - Update 8
Potential Container Dwell Fee Surcharge for Pacific Southwest Ports
On Oct. 25, 2021, the Biden Administration announced that, effective Nov. 1, 2021, the ports of Los Angeles and Long Beach would begin charging a “Container Dwell Fee” on all long-dwelling cargo as terminal congestion had reached historic levels. Since that time, the ports have delayed consideration of the fee week after week. However, given that congestion continues to impact vessel and landside supply chain operations, the likelihood of the Administration implementing the fee has risen significantly this month.
Since last year’s announcement, supply chains have endured even more disruptions, including the COVID-19 pandemic, historic levels of goods coming into the U.S., geopolitical conflicts, and challenges in global markets. In addition, the ILWU and the PMA have initiated labor negotiations for a contract that expires July 1st in advance of shipping peak season. In its efforts to counter these supply chain stressors, the Biden Administration has tasked its “Supply Chain Disruptions Task Force” and the U.S. Dept. of Transportation to enact strategies they believe will mitigate disruption.
While a detailed FAQ document is available on Maersk.com, general program parameters are as follows:
- The fee will be applied to all containers that remain at the terminal for 9 days or more and rail containers for 6 days or more
- The cost is $100 per container on the first day past the set dwelling limit for terminal or rail and will increase by $100 increments for each day that follows (i.e., $200 for day 2, $300 for day 3 and so on)
- The relevant Port Authority will be charging the fee and submitting the bill to Ocean Carriers to act as collection agents to charge and invoice those with a cargo interest in the laden import containers
- Maersk will collect any amounts due from cargo owners (or their designated demurrage payer) before releasing the cargo
Rest assured, Maersk continues to explore different options for moving longstanding containers to help customers mitigate exposure to this new government fee. On May 3rd, we published our Customer Advisory, “Off-dock Drayage Program for Long-Dwelling Containers Begins May 16 in Los Angeles and Newark.” The advisory stated that Maersk will begin transferring longstanding import containers in its Los Angeles and Newark gateways to off-dock yards as of May 16th. While we continue to make progress, similar dray-off programs are being considered in other locations such as Seattle, Houston, Savannah, and Chicago.
Customers with cargo in the Los Angeles (APMT) and Long Beach (TTI) terminals are encouraged to take advantage of our “Saturday Gate Incentive,” which offers a $100 per container credit for import pickups. We have extended this credit program through June 18th.
We understand the fee implementation could put all parties involved in a difficult situation as truck, chassis, and warehouse capacity are all extremely stretched. We ask for your continued support in prioritizing the pickup of ageing cargo as we work together to restore fluidity of the marine terminals and inland hubs for a more reliable supply chain. Please reach out to your Customer Experience representative should you have any questions.
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