The surprise decision by the ports of Los Angeles and Long Beach this week to impose hefty surcharges on ocean carriers that take too long removing containers from overcrowded terminals has raised more questions than answers. Freight industry professionals — and the Federal Maritime Commission — want to know where the twin ports are getting the authority to levy the surcharges.
Port officials announced the fees on Monday and the two harbor commissions will vote to approve them on Friday, but the FMC has yet to receive any documents describing the plan.
Unclear is whether the Southern California ports will draw their authority from an 8-year-old agreement with the FMC allowing the two agencies to discuss and collaborate on projects and programs that address congestion issues, transportation infrastructure and pollution reduction or from an FMC agreement with the California Association of Port Authorities that dates back to the mid-1940s.
The Shipping Act of 1984 grants immunity from antitrust laws to maritime terminal operators so they can agree on common operational practices. In order to receive the immunity, parties must file notice with the FMC outlining the topics and actions they want to undertake together.
The ports of Los Angeles and Long Beach compete with each for cargo but have collaborated much more in recent years to better compete against ports in other regions that are gaining in container market share. They also work hand-in-hand to address joint problems such as security and carbon emissions.
“The commission has requested information from the ports about this announcement and responses are expected imminently. Information provided by the ports will be reviewed to inform the commission of any next steps. The commission regularly requests additional information from agreement parties as part of its oversight and monitoring activities,” the FMC said in a statement provided to American Shipper.
Under the Los Angeles-Long Beach proposal, ocean carriers will be charged $100 per day, increasing in $100 increments per container per day, for containers scheduled to move locally by truck that dwell for nine days or more, and for containers scheduled to move by intermodal rail that dwell for six days or more. The levies are effective this coming Monday.
Carriers have indicated that they expect to pass on the fees to import customers, but if the storage-time clock starts Monday, they may have to absorb the initial assessments themselves because FMC-approved tariff rules require terminal operators and carriers to give customers a 30-day notice of any tariff changes.