Shipping companies that leave containers on the docks at the Port of Los Angeles will have to pay fees of $100 a day per container, rising in increments of $100 each day that containers aren’t moved.
The Port of Los Angeles commissioners voted 4-0 on Oct. 29 in favor of the tariff, presented by Eugene Seroka, executive director of the port.
The log jam of 38,000 containers at the terminal is unprecedented, multi-faceted, and that’s the reason for a temporary tariff to charge shipping companies $100 a day per container beginning Nov. 1 with collection beginning Nov. 15.
The tariff that Seroka proposed would rise by increments of $100 per day, meaning a $100 fee on day one would become a $200 fee per container on day two.
Support and Solutions
Seroka says he wants the program to be highly unsuccessful, but that “aging boxes are moving out at a much slower rate than are moving in.”
The tariff has unanimous support from the California Association of Port Authorities.
The tariff isn’t meant to boost revenue for the port, Seroka says, but “to drive behavioral change.”
Containers at the terminals sitting for more than nine days accounts for more than 47% of all cargo at the port.
More truck drivers are a long-term solution to clearing up the container jam in the Port of Los Angeles and Port of Long Beach, says Eugene Seroka, executive director of the Port of Los Angeles.
“We want to make trucking a profession that people want to come to,” says Seroka, during a special board meeting of the port.
He says cargo is moving. About 52% of all incoming containers are being moved out but he noted that with early estimates of GDP at 2%, the containers need to get moving.
Seroka cited the concerns of a Southern California toy manufacturer in addition to supplies needed for hospitals and manufacturing companies throughout the U.S.
The Problem with Empty Containers
Critics who spoke against the measure, including the Harbor Trucking Association, say the problem has been building for the past five years and thousands of empty containers are stuck at the port.
In 2015, a report from the Federal Maritime Commission report, quoted on Oct. 11 in the Daily Breeze, said “congestion at ports and other points in the nation’s intermodal system has become a serious risk factor to the relatively robust growth of the American economy and to its competitive position.”
Seroka noted that “hundreds of facilities” in the Inland Empire are being rented to place empty containers and that those will have to be collected.
He told the commissioners that the port is prepared to be open 24 hours.
Part of the problem that wasn’t seen in previous years was the Covid-19 shutdown of malls and retail outlets that led to massive sales via e-commerce. The National Retail Federation has forecast 2021sales to come in at $4.44 trillion to $4.56 trillion, a 10.5% to 13.5% jump over 2020.
Seroka says he’s working with industry leaders “to put a dent” in the backed-up cargo before Nov. 15.
May 2021 was the port's busiest month in its 114-year history when the port processed 1 million foot equivalent units, the first time a Western hemisphere port reached that amount in a calendar month.
The Port of LA is the busiest container port in North America.