California ports are delaying $ 4.8 million in fines at the last minute

  • On Monday, ports in Southern California delayed the collection of fines for cargo that had lingered too long.
  • The fines took effect on November 1, but will not be levied until November 22.
  • The total fines currently come in at over $ 4.8 million, but will continue to rise rapidly.

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The ports of Los Angeles and Long Beach delayed the collection of millions of dollars in fines for shipping companies that had let cargo containers pile up at terminals on Monday – the same day the locations were scheduled to begin the process.

The two ports pushed the deadline back to 22 November. Port of Los Angeles CEO Gene Seroka said the ports had seen “significant improvements” in efforts to clear containers out of ship terminals since the $ 100-per-million fines. day of cargo left was announced. on October 25th.

“It’s clear that everyone is working together to speed up the movement of cargo and reduce the backlog of ships off the coast as quickly as possible,” said Port of Long Beach CEO Mario Cordero.

Seroka and Cordero said the twin ports have seen a 26% drop in cargo that had lingered at the locations for more than 9 days – although the number may be deceiving.

To date, nearly 50,000 containers have remained in ports after the six- to 9-day grace period. When the fines were initially announced, 58,900 containers were set to receive fines. Data from the Port of Los Angeles show that most of the containers on site were moved when the fines were first announced. But recently, the backlog of containers on land has worsened, while the number of cargo ships waiting to enter the port has set new records.

The shipping containers began to accrue $ 100 per. daily fines on November 1st. Fees increase by $ 100 every day, the containers that will move overland remain in ports for the last 9 days, while goods that will move by rail are charged after 6 days. Currently, over $ 4.8 million in total fees is on top of the shipping companies that have allowed their containers to remain in ports after the deadline. Trade publication Freight Waves estimates that fees are likely to peak at $ 100 million a day by the end of this week.

Several experts have previously told Insider that they expect the fees will not do much to move the goods out of ports, though the extra cost is likely to mean higher prices for consumers. On Monday, 85 business groups, including the National Retail Federation, wrote a letter to the Federal Maritime Commission warning that the charges would be passed further down the supply chain, Freight Waves reported.

The new daily fees would be an addition to even higher overhead fines. Carriers are subject to overlay fines for each day the container stays in port after the allotted time – typically between four to seven days after the container is unloaded from the ship. The fines range from $ 75 to $ 300 per day and can increase the longer the container stays in port.

On Friday, Hapag-Lloyd warned in its earnings call that the charges could also lead to an increase in leftover cargo.

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