By Daily Breeze
This article was published in the Daily Breeze (a Southern California-based publication) November 29, 2021. While this outlet is not a regular source of news for us, we felt it provided the best background and context for this story.
The ports of Los Angeles and Long Beach will not implement fees for lingering containers until at least next week, the fourth time officials have delayed the potentially hefty penalty — and third time in as many weeks — because, the nation’s two busiest seaports said, they continue seeing improvements in a backlog that has contributed to an unprecedented supply chain crisis.
Since the ports announced the fee in late October, the amount of aging cargo at their terminals has decreased 37%, officials announced in a Monday morning, Nov. 29, press release. That’s a four percentage-point improvement from Nov. 22, when the ports reported a 33% decline.
On Oct. 25, when the policy was announced, the number of aging containers — those that had been on terminals for at least nine days — was 62,158 combined, Port of LA spokesman Phillip Sanfield said. On Sunday, Nov. 28, the number of aging containers at both ports was 39,123.
The decision to once again delay the fee — which port officials have said is not meant to be punitive — was made collaboratively with U.S. Port Envoy John Porcari, ocean liner companies and marine terminal operators, the ports said Monday.
“We don’t want to make it look like the crisis is over here,” Port of Long Beach Executive Director Mario Cordero said last week, “but I think after the first of the year, we’ll see some mitigating factors and fewer ships.”
Under the 90-day policy, which is set to end early next year, ocean carriers would be charged $100 for every container set to leave via truck that sits nine days or more, and for every container set to leave via rail that sits charge would at least six days. The fees would increase $100 per container per day.
The fee was supposed to go into effect Nov. 1, but was initially delayed until Nov. 15. Since then, the ports have delayed the fee on a week-to-week basis.
Containers lingering at terminals is just one aspect of a complex bottleneck that has infected every portion of the supply chain, with freighters waiting days and sometimes weeks to dock, truckers not having enough chassis to carry containers out of the ports, and warehouses overflowing.
The crisis has threated to slow the country’s economic recovery and lead to shortages during the holidays. And it stems from the coronavirus pandemic.
After an initial cargo crash during the first half of last year, consumers shifted their buying habits to align with the limited entertainment options for which they could spend disposable income — setting off an online buying spree. That shift caused imports to skyrocket, with both ports routinely breaking monthly cargo records.
That surge won’t abate anytime soon, officials have said.
But the supply chain, which officials have long said was vulnerable, couldn’t handle the stress.
The amount of time containers scheduled to leave on trucks stayed at the docks set a record last month, with an average of 7.64 days, according to the Pacific Merchant Shipping Association, which represents terminal and carrier operators. That broke the previous record of 5.9 set the month before.
Containers leaving via rail, however, continued seeing improvement, with an average dwell time of 3.9 days in October, down from 5.5 in September, PMSA said.
Before the pandemic, the ports said, those wait times averaged under four days for trucks and fewer than two days via rail.
The threatened container fee, however, is not the only initiative that aims to solve the crisis, both in the short-term and the long-term.
Both ports, for example, have worked to free up space at various properties where they can store empty containers.
And both Gov. Gavin Newsom’s office and the White House have been involved in ongoing discussions, with the infrastructure bill President Joe Biden signed earlier this month setting aside $17 billion to improve “infrastructure at coastal ports, inland ports and waterways, and land ports of entry along the border,” according to a fact sheet on the effort.
The relatively tiny Port of Hueneme, meanwhile, has activated a nearly 20-year-old agreement it has with Naval Base Ventura County that allows it to use a federal wharf.
The Oxnard port, which announced the move last week, will use a wharf at the base that includes 21 acres of land, according to the announcement.
The Port of Hueneme considers itself a niche hub. It moves about $10.85 billion worth of goods annually. It typically handles perishables, refrigerated goods and cars, said Dona Lacayo, chief commercial and public affairs officer.
The Port of Long Beach moves $200 billion in cargo annually — and LA moves for than $250 billion in goods.
The Hueneme port, according to its website, is too small to handle the massive ships that dock at the LA and Long Beach ports.
A typical ship that calls on Hueneme can carries 1,250 to 1,500 containers. Ships that dock in LA and Long Beach usually carry 5,000 containers — and some transport up to 9,000.
But by using the naval wharf, Hueneme can help with the congestion in Long Beach and Los Angeles by accepting chartered ships carrying “hot” cargo, including medical equipment and retail goods, Lacayo said.
Some retailers, including Walmart and Target, have chartered their own ships recently so they can get around the congestion at the San Pedro Bay ports.
“NBVC recently welcomed a large cargo vessel,” said Daniel J. Herrera, NVBC’s assistant program director for port operations, said in a statement. “Ports America already off-loaded a large number of forty-foot containers into lot 22 onboard Port Hueneme which is merchandise expected to have direct impact with helping to support holiday supply demands.”
The Hueneme port can now accept freighters that would have initially gone to the San Pedro Bay Complex, which could alleviate some of the congestion, officials for the Ventura County port said.
“We are delighted to come together to meet the challenge of providing a solution to help keep essential goods moving,” Jason Hodge, president of Oxnard Harbor District, which owns the port, said in a statement. “Our long-standing history of partnership continues with this call-to-action to address the national supply chain challenge.”