UPDATE: 3/15/2022—The ports of Los Angeles & Long Beach announced that they have delayed implementation of the Container Excess Dwell Fee further, now targeting a start date of March 18, 2022. The two ports have seen a decline of 64% combined in aging cargo on the docks, since announcing the new fee in October.
UPDATE: 11/16/2021—The ports of Los Angeles & Long Beach announced that they have delayed implementation of the Container Excess Dwell Fee by at least one week, now targeting a start date of November 22, 2021.
The two ports made a joint announcement Monday afternoon, citing a 26% reduction in aging cargo on the docks since the fees were revealed on October 25. The Port of Long Beach confirmed they have seen a 38% reduction in their own terminals.
The twin ports have considered this a sign that supply chain partners are taking serious steps to reduce long dwelling containers on terminal property and see this as a significant enough improvement to delay the fee implementation.
Further postponements of the fees are not guaranteed. Though the fees were intended to be an incentive tool to facilitate the movement of containers off terminal property, if progress continues the ports may reevaluate the need to begin collection of the charges.
Beginning on November 15, 2021(see above update), the Container Excess Dwell Fee being implemented by the Ports of Los Angeles and Long Beach (LA/LB) will take effect. Mohawk Global has been following all developments to provide insight into the handling and applicability of this fee.
The following is a summary of the situation.
Containers that match the following criteria will be judged to be in violation of excessive dwell time and will be subject to the fee:
- Loaded Local Import Containers—arrive to LA/LB Port and transported out of the port by truck—that have been in the terminal in excess of eight (8) days, beginning on Day 9.
- Intermodal Import Containers—arrive to LA/LB Port and transported to an inland point outside of California by rail—that have been in the terminal in excess of five (5) days, beginning on Day 6.
The fee will begin to accrue on November 15, 2021. Any container judged to be in the terminal in excess of the above time will be considered on the 6th / 9th day of dwell at that time, regardless of actual amount of days in the terminal. There is no expectation that the fee will be applied retroactively on containers already in excess between the 11/1 to 11/15 grace period.
The day of discharge from vessel will be considered “Day 0”, with each new day calculated at 3:00 AM the following day, local time.
The fee will be based on calendar days and not working days. Saturdays, Sundays and holidays will count towards the execution of the fee.
The fee will be implemented at $100 for the first day of fee applicability, increasing incrementally by $100 each additional day. Below an illustration of this method.
Loaded Local Import Containers
|Days on Terminal||Daily Charge||Cumulative Charge|
|More than 13||Incremental $100 increase per day|
Intermodal Import Containers
|Days on Terminal||Daily Charge||Cumulative Charge|
|More than 10||Incremental $100 increase per day|
There is no maximum numbers of days or applicability.
How the Fee Will be Invoiced & Collected
The port will charge the fee to the steamship lines who will then turn out invoices to the shippers and forwarders. If Mohawk is the forwarder of your containers, we will then invoice the fee to the freight owners.
The fee will not be collected in advance of container release. It will be processed after the container is out-gated. Mohawk will issue applicable invoices as they are received from the Steamship Lines.
Applicability for Customs Exams, Closed Yards or Unavailable Appointments
At this time the fee is expected to be assessed without regard for extenuating circumstances such as Customs Exams or Unavailable Appointments. Some terminals—specifically APMT and TTI—have said they will not assess the charge if containers are in closed parts of the yard, though in practice this will be a difficult situation to manage.
If Mohawk Global is managing the delivery of the container, we will watch and document these instances in case there will be an avenue to fight or recuperate the charges at a later date.
If clients oversee their own deliveries or use other providers to facilitate, we recommend working with providers to do the same.
Concern for Intermodal Containers
There is concern about this fee’s applicability with intermodal containers as they have less time allowed before the fee, and we have little control over the movement of containers to the rail heads and beyond.
However, the Port of Long Beach reported that on 11/1, of the 30,200 container subject to the fee only 1,643 (5.5%) of them were intermodal containers. As of 11/9 that number had dropped to 573. While similar numbers were not available from the Port of Los Angeles, this suggests that intermodal containers will not be the immediate concern.
Of further good news, BNSF & UP announced the end of their metering measures which limited rail movement out of LA/LB to major inland points, which will help facilitate movements.
Future of the Fee
The fee has been announced with an applicability for ninety (90) days, beginning November 1, 2021, which would mean an end date of January 31, 2022.
However, the Ports of LA/LB have the decision to extend grace periods where the fee would not be collected, if they see that significant improvement is being made in removing containers with excessive dwell.
At the same time, there is no language to preclude the ports from extending the fee beyond the stated date, should no improvement be seen.
We will communicate significant future developments as they come. If you have questions, reach out to your Mohawk Global representative.