Companies whose shipping containers linger too long at the ports of Los Angeles and Long Beach face new fines beginning Monday in an effort to reduce a cargo jam that has led to supply shortages and higher prices for consumers.
The ports — which handle 40% of the country’s container imports —have seen a surge of shipments since the COVID-19 pandemic, but a lack of truck drivers and overflowing warehouses have resulted in containers piling up at the ports and creating bottlenecks.
Under the new program, ports will charge carriers $100 per day per container that stays too long at the terminal. The collected fees “will be re-invested for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts,” port officials said when announcing the fees in October.
Containers leaving the port by train will begin to be charged if they remain on site after 6 days under the program. Those leaving by truck have 9 days before fees begin stacking up, according to officials.
President Biden also recently waded into the issue, ordering the ports stay open 24/7 to reduce the backlog.
As of Friday, the number of containers sitting at the ports had decreased by about 20% but the wait time for ships to deliver their goods continues to be extremely long.
Despite around-the-clock operations, the average ship has a wait of almost 17 days before berth. Before the pandemic, ships had set arrival times and went straight to a berth for unloading, said L.A. port’s Executive Director Gene Seroka.
The new fines could help more products reach store shelves before the holidays, but retailers still suggest shoppers buy their gifts early in case supplies continue to lag.
Consumers may also see an increase in prices as some of the shipping costs are passed on to them.
Port officials are expected to provide an update on the situation at the ports during a news conference Tuesday.