With The Ports Running Out Of Room, Containers Left Behind Will Soon Cost $100 A Day
The ports of L.A. and Long Beach, the two largest container ports in the nation, will start fining shipping companies if they don't move their containers out fast enough. It’s the latest in a series of temporary fixes to help ease an unprecedented cargo backlog that's creating a ripple effect across the country.
Port officials say they're running out of room for all the boxes that are now sitting at their terminals, forcing ships to wait even longer at anchor for an empty berth. Under a new policy announced this week, once a carrier drops off a container, the clock will start ticking.
If cargo is supposed to go on a truck, companies will have nine days to send it out before they're slapped with a $100 fine for each container. It’s a much shorter turnaround for items bound for a train — they need to be out of the terminal within three days before those fees kick in.
After Nov. 1, carriers could end up paying a $100 per day per container. Fines will grow the longer those boxes sit around. Some shipping companies have said they can’t move cargo any faster, due to labor shortages and other supply-chain issues on land.
Fines will be reinvested by the two ports into programs that will “enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay,” according to an announcement by the Port of Los Angeles.
The new policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, the U.S. Department of Transportation and multiple supply chain stakeholders.
“I support the actions taken by the ports of Los Angeles and Long Beach,” said John D. Pocari, Port Envoy to the White House task force.
“While we’ve seen new records set in terms of throughput this year at West Coast ports, we need more players throughout the supply chain to keep stepping up," he said.
When President Joe Biden announced that the two ports were moving to a 24/7 operation, large companies such as Walmart, Target, FedEx and UPS committed to increasing their hours of operation to help alleviate the bottleneck.