There’s good news for the clogged Southern California shipping ports. The L.A. Times reports that things are sort of improving thanks to newly imposed fines on shipping companies.
Here’s the situation. Last month, the Biden administration announced a plan to get the ports clear by Christmas to satisfy everyone’s need for stuff. There are shortages across the board right now. But that idea didn’t mesh with the reality of the situation. Shipping containers have been piling up for months at the ports because of a worker shortage: there’s no one to unload the containers and no truck drivers or train engineers to bring the goods inland to be distributed.
So port officials went to the next best thing, money.
...officials at the ports voted in late October to impose a new fee on containers that sit around for more than six days if intended for rail transport or nine days if intended for trucks. Starting Nov. 15, the ocean carrier companies that brought those idling containers in will be charged $100 on the first day past deadline, $200 on the next, and so on — an escalating fine that could quickly grow into the tens of millions of dollars a day for the thousands of containers on the docks.
The fines seem to be intended more as a threat to get cargo moving than anything. And it seems to be working. Container volume is down 14 percent at the Port of L.A. and 26 percent in Long Beach. The executive director of the Port of Long Beach says “This fee is already meeting its objective.”
Carrier Companies have also committed to sending in ships to clear out containers to avoid fines, known as sweeper ships. This would further help alleviate some of the cloggings the port has seen to get containers out.
The ocean carriers have also responded with plans to send sweeper ships to remove the empty containers — approximately 30% of the total boxes piled up — that are clogging up the docks.
Matt Schrap, CEO of the Harbor Trucking Assn. thinks that these fines are forcing the companies to clear out containers they’d otherwise leave sitting, calling it a “forced evacuation.” Will this be enough to get things moving by the holidays? Hopefully. Just keep checking those store shelves.