Maersk believes that the Biden Administration is likely to proceed with the implementation of the “Container Dwell Fee” on all long-dwelling cargo at Los Angeles and Long Beach container terminals as congestion continues to impact vessel and landside supply chain operations.
“The likelihood of the Administration implementing the fee has risen significantly this month,” said the Danish shipping company in a recent customer advisory.
On 25 October 2021, the Biden Administration announced that effective from 1 November 2021, the two major Californian ports would begin charging the fee on long-dwelling cargo as terminal congestion had reached historic levels. Since that time, the ports have delayed consideration of the fee week after week, seeing significant declines in ageing cargo on their docks since the announcement of the programme.
Maersk now believes that there are increased possibilities of the fee implementation. The Copenhagen-based box line explains, “Since last year’s announcement, supply chains have endured even more disruptions, including the Covid-19 pandemic, historic levels of goods coming into the US, geopolitical conflicts, and challenges in global markets. In addition, the ILWU and the PMA have initiated labor negotiations for a contract that expires on 1 July in advance of the shipping peak season.”
Maersk continued to note that “In its efforts to counter these supply chain stressors, the Biden Administration has tasked its ‘Supply Chain Disruptions Task Force’ and the US Dept. of Transportation to enact strategies they believe will mitigate disruption.”
Shipping analyst Lars Jensen said in a LinkedIn post, “I do not know on which basis Maersk believes the likelihood of implementing the fee has increased, but in a situation where dwell conditions appear not to be improving in the slack season and with the peak season to be coming, soon this will indeed put more pressure on the port to address the dwell situation.”
Jensen noted that despite the fact that we are in the traditional slack season, the dwell time problems in Los Angeles has not really improved in recent months. He said that there was a distinct improvement from the end of October until January, but since then the main trend has been a gradual worsening.
