The Port of New York and New Jersey will implement a new quarterly “container imbalance fee” for ocean carriers to reduce congestion as the peak cargo season approaches.
The container management fee will target excess empty containers being stored in the port for long periods, and is slated to take effect Sept. 1, 2022, pending a mandatory federal 30-day notice period, the Port Authority of New York and New Jersey (PANY/NJ) reported on Aug. 2.
“Under this new container management fee, which will be assessed on a quarterly basis, ocean carriers’ total outgoing container volume must equal or exceed 110% of their incoming container volume during the same period, or they will be assessed a fee of $100 per container for failing to hit this benchmark,” PANY/NJ said. “Incoming and outgoing containers include both loaded and empty containers, excluding rail volume. Fee proceeds will be used to offset the costs of providing additional storage capacity, and other expenses incurred by the glut of empty containers.”
The fee will be reassessed “when the global supply chain crisis eases,” according to PANY/NJ, with a review as needed, no later than September 2023.
The seaport has been handling a cargo increase of nearly 12% year-to-date compared with the same period last year and a rise of 34% in cargo volume from the same period in 2019, pre-pandemic. To help manage empty containers, it has already repurposed 12 acres within Port Newark and the Elizabeth-Port Authority Marine Terminal for temporary storage of empty containers and long-dwelling import containers, and said it is in the process of negotiating or investigating additional storage space.
PANY/NJ added that it has “met with ocean carriers both individually and as an industry and identified additional mitigation strategies, conducting targeted outreach to shipping companies and cargo owners currently storing their import containers within the port for excessive periods. Through much of the pandemic, the port’s terminal operators have offered longer weekday hours and weekend terminal hours to allow additional access to truck operators willing and able to work outside of traditional terminal operating hours.”
“We rely heavily on our port partners as the downstream links in a vast global supply chain that needs full cooperation in order for international commerce to function and deliver the essential goods that the region’s residents need,” said PANY/NJ Chairman Kevin O’Toole. “As we continue to manage record cargo volume and work with our tenants and port stakeholders for the removal of empty containers in a timely manner, we call on all industry stakeholders to find sustainable, long-term solutions to an industry-wide problem affecting many U.S. ports.”
The San Pedro Bay, Calif., ports of Los Angeles and Long Beach last fall reported they would assess a surcharge to ocean carriers for import containers that dwell on marine terminals. Ocean carriers would be charged for every container that was scheduled to move by truck and dwelled nine days or more, or by rail and dwelled three days or more. The ports were slated to charge $100 per container, increasing in $100 increments per container per day. The fee has not yet been imposed.
However, since the program was announced, the two ports said they have seen a combined decline of 26% in aging cargo on the docks. The San Pedro Bay ports will next consider implementing the “container dwell fee” on Aug. 26, 2022.