(630) 595-7300 1099 Pratt Blvd. Elk Grove Village, IL 60007 info@intlfreight.net
Compounded Fees

There’s more than a bit of chaos in the port of Los Angeles and Long Beach, California with the new bill being passed and taking effect as of November 1st 2021. Starting November 15th, the compounded fees for containers in the ports will start being assessed. 

Under the 90-day policy, the Port of Los Angeles will charge ocean carriers for each import container that falls into one of two categories:  In the case of containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more. For containers moving by rail, ocean carriers will be charged if a container has dwelled for six days or more. However, it’s critical to note where the free days are concerned that many sources claim that containers moving by rail only have three days of free time and not six. Unfortunately if you check the sources in that link, they both state six days. 

 

Because the Port Commission released the notice stating six days and hasn’t updated that on their website, we are holding to their notice until we receive other information directly from the ports. Readers should absolutely be prepared to see that revised to three days once things are clarified on November 15th. 

 

The $100 fee for each day doesn’t just mean a simple $100, $200, $300, but rather a much more complicated system for carriers where each day compounds with the last, making it more and more expensive. One day will be $100, sure, but the second day will be $300, the third day $600, and from there, even more. 

Here is a chart to demonstrate just how expensive this is getting for carriers as days pass:

 

Day After Free Time

Daily Fee Total Surcharge per Container
1 $100 $100
2 $200 $300
3 $300 $600
4 $400 $1,000
5 $500 $1,500

This means if cargo is in port for the 12 days average like they have been since COVID-19 started, prices will skyrocket to $7,800. Per container. A price that no one wants to pay if they can help it. The consumers are getting more and more frustrated by rising prices while their purchases are being delayed. Meanwhile shippers are also losing their patience as the system continues to congest. 

 

Many issues are causing this logistical nightmare including the volume of containers carried by these mega-container ships along with a shortage of chassis – the equipment needed to transport these containers – not to mention the shortage of drivers themselves. And the fact that with the lax stacking laws for the next 90 days, most of the containers can’t be accessed as they are buried under several other containers. Unfortunately, things are backing up faster than they are going out. 

 

This is where Edward J. Zarach & Associates steps up. We are a full-service logistics provider. We offer services for importers and exporters in the United States and around the world. We offer international freight forwarding services, Customs brokerage, warehousing, and distribution, as well as local and long-distance trucking, consultative, and professional services. 

Leave a Reply