The backlog at the port has impacted the global supply chain leading to inflation and delayed deliveries.
The “harbor tariff,” as described by the L.A. City Council, will fine shipping companies that leave empty containers at the port for more than six days if the containers are to travel by rail, or nine days are meant for trucks.
If the containers remain past the deadline, companies will receive an initial $100 fine, and an additional $100 for every subsequent day they remain. For example, on the second day, the fine will be $200 on top of the already owed $100, making for a grand total of $300.
L.A. City Councilman Joe Buscaino said Sunday there are currently 90 container ships waiting off the coast near the ports of L.A. and Long Beach carrying about $85 billion worth of goods. The councilman said the fines are not to meant to turn a profit for the city, but to decongest the port.
“We need to send a strong message and use economic incentives to move this cargo off the docks and get it to its rightful destination,” said Buscaino, who pushed for the implementation of this fine. “Implementing this new tariff will help us incentivize the movement of goods to their final destination.”
Dr. Noel Hacegaba, the deputy executive director at the Port of Long Beach, backed the councilman’s claim.
“The idea here is to encourage the rapid evacuation of these containers that have been sitting on the port terminals for so long,” he said. “The idea is to clear capacity.”
Hacegaba said the backlog is already improving following the announcement of the fees.
“That fee is already having its intended effect,” he said. “We are seeing a 33% decline in those long-dwelling containers that have been sitting at the ports for nine days or more.”
Hacegaba said the ports are working around the clock to ensure that the backlog is cleared before the holiday season, especially as Black Friday, one of the busiest shopping days of the year, approaches. He said that the ports are working around the clock to bring the goods ashore and onto the shelves in time for the holidays. The port has also expanded its hours with some terminals open 24 hours a day, seven days a week.
“We’ve never done anything like this before,” Hacegaba said. “It’s all in an effort to bring those containers to the terminal and get those goods to the store shelves in time for the holidays.
Buscaino echoed Hacegaba’s sentiments, but also wanted to assure that the neighboring communities were also at the top of the mind of officials.
“We want to make sure that gridlock does not spoil Christmas and that our neighboring communities are safe at the same time,” Buscaino said.
President Joe Biden announced last month that a plan had been reached in which the Port of L.A. would operate 24 hours a day in an effort to ease the bottleneck. The White House has also considered deploying the National Guard, a move which was also requested from L.A. City Attorney Mike Feuer.
A multi-billion loan agreement has also been reached between the state of California and the U.S. Department of Transportation to improve shipping infastructure at the ports.