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Associations seek relief from detention, demurrage fees in backed-up LA/Long Beach ports

Photo: Jim Allen/FreightWaves

Two key trade associations representing drayage companies that operate in the ports of Long Beach and Los Angeles are asking for a temporary suspension of detention and demurrage charges from the key entry ports that are currently overwhelmed with business.

Citing a chassis shortage that was described as effectively “none available,” the Harbor Trucking Association and the California Trucking Association released a statement Thursday that said cargo flow at the ports are “nearing a complete gridlock due to a lack of dual-transactions and the chassis shortage.” Dual transactions occur when a truck driver brings in a container and picks up a container in the same trip.

Truckers can’t do anything on their own to solve the problem, according to the release by the CTA and HTA. But “carriers and terminals continue to charge unreasonable detention and demurrage penalties, originally designed to promote the efficient pick-up and drop-off of containers, despite inhibiting the trucker’s ability to complete import, export, and empty transactions.”

According to the statement, this is not the first time that drayage drivers have sought relief from detention. “Earlier this year, the ability to return empties was inhibited by gate closures and clunky empty appointment systems that were in their infancy,” the statement said. Relief from detention was sought then, and two unidentified carriers “came to the table and did give a broad waiver of detention fees.”

But beyond that, “millions of dollars in detention was assessed to shippers and truckers despite the glaring inability for truckers to return empty containers at that time,” the statement said. 

In a phone interview with FreightWaves, Weston LaBar, the executive director of the Harbor Trucking Association, conceded there is no single entity that can grant relief from demurrage and detention charges. The statement released is like a “first line of defense” to seek relief from the ocean carriers that can grant such waivers. 

“We are also talking to and encouraging port authorities to look at their powers to step in and bring some common sense to this equation,” he added.

The statement by CTA and HTA, according to LaBar, is a “grand gesture to our supply chain partners to do the fair and equitable thing to waive these fees.” But the target is also the port authorities of Long Beach and Los Angeles, to have them “enforce these requests should our supply chain partners and ocean carriers decide to do nothing.”

The problem as LaBar described it is multilayered. Import levels are huge. LaBar said many marine terminals are reporting 10,000 to 15,000 containers sitting on their docks. That means that drayage drivers who seek to return an empty container are often turned away because there is no ability to take the empty container back. But then sometimes they still face a late fee, LaBar said. 

LaBar said the root causes are many: the big import levels, a lack of efficiency at the ports for setting appointments for drivers to pick up and drop off containers, the tight market for drivers and the employment squeeze also for work crews on the dock. “What happens if you need eight gangs to work a big vessel?” LaBar said. “You’re probably only going to get five gangs. There’s not enough skilled labor coming out of the hiring halls that can be distributed among the 12 terminals.”

He added that situation was a “coastwide” problem, not just limited to the ports of Long Beach and Los Angeles.

In their statement, the two associations said they understand that the tight conditions on the port are having an impact on many parties, “only the trucker and the shipper are being charged unreasonable fees that are going to the very entities that are restricting their ability to meet expectations.”

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.