California state senators and assembly members gathered for a hearing on Wednesday, Nov. 3 to discuss the congestion at Southern California’s ports, caused by a long line of ships waiting to unload their cargo.
The delay in ships being able to come into port has caused supply chain issues.
“This is also becoming an economic and social problem as consumers face significant delivery delays and begin to see empty shelves at stores,” said Assemblymember Patrick O’Donnell, who represents the areas of both the Port of Los Angeles and Port of Long Beach.
According to O’Donnell, the Port of Long Beach and the Port of Los Angeles collectively handle 40% of the nation’s imports and 25% of its exports.
On Friday, Oct. 29 the Los Angeles and Long Beach harbor commissions voted to start a “Container Excess Dwell Fee,” which will fine any company whose containers stay at the ports for nine days or more.
Companies will be fined $100 per container, with the amount increasing by $100 per container each day the containers remain at the ports.
The fee is to motivate companies to remove their cargo from the port as soon as possible.
When asked what measures the ports were making to ensure the cost of the fees would not be passed onto everyday consumers, Executive Director of the Port of Long Beach Mario Cordero said increasing prices was not the intent of the fee and that the fee would be temporary.
“We’re trying to push all the buttons and take all the actions that we need to have to […] incentivize [carriers] to address this issue that we’re in,” Cordero said.
Executive Director of the Port of Los Angeles Gene Seroka said he couldn’t guarantee that the fee wouldn’t increase the cost of shipped items once they reached store shelves. He pointed out that shipping companies have brought in record profits in the last year, suggesting that the companies will be able to absorb the cost of the fee without passing it on to their customers.
According to Seroka, out of 79,000 import containers at the Port of LA, 38,000 had been there for more than nine days.
Seroka said that since the Container Excess Dwell Fee was announced, the LA port has received requests to move 9,500 containers from the port into long term storage.
Cordero asked the state legislature to consider including funding to help relieve pressure and increase sustainability within the state supply chain when deciding on the state budget.
“We will request that the state look at ongoing continued support for these ports,” Cordero said. “So we can keep pace with other states, remain competitive, and again—big picture—for California to remain the fifth largest economy in this world.”
During the hearing, the Port of Oakland was considered as an alternative destination that waiting ships could be diverted to.
According to Assemblymember Mia Bonta, the Port of Oakland is currently operating at only 50% capacity.
Bonta said that the Port of Oakland “has the ability to be a part of the solution, which has the capacity and the workforce to help alleviate the supply chain backlog.”
According to Seroka, on Nov. 3 there were 96 ships at anchor off the coast, 70 of which were container ships.
Half the container ships are destined for the Port of Long Beach and the other half will go to the Port of Los Angeles.
“An estimated $64 billion in cargo is idling on the coast waiting to unload,” Assemblymember Vince Fong said. “With the holidays right around the corner, Christmas and the months beyond may be different for Americans across the country.”
