Getty Images/Sasin Tipchai
- California ports will start fining shipping firms if they don't clear containers in time.
- Containers will be allowed to stay on the docks for between three to nine days without accruing fines.
- The idea is to ease port jams and allow the record number of ships stuck off the coast to dock.
The ports of Los Angeles and Long Beach will begin fining shipping companies $100 a day for every container left on the docks.
The idea is to put greater pressure on shipping companies to move cargo from docks to help ease port jams, enabling the record number of ships that are stuck at anchor to dock and unload new containers.
The ports said Monday that shipping firms have three days to move containers if their next step is by rail, or nine days if the next step is by truck, as first reported by the Associated Press.
If the containers stay longer, the ports will impose the daily fine until the containers are taken away. These new rules will come into force on November 1, the ports said.
The two ports have remained clogged for months because of the global supply chain crisis. After a fall in shipping demand during the early days of the pandemic in 2020, a surge at the end of that year led to delays and blockages across the world.
Containers have been stacked up on the docks for weeks waiting to be unloaded, but a shortage of on-dock workers and truck drivers has led to long delays in the process.
These port jams mean that ships are unable to dock and drop new cargo. A spokesperson for the Marine Exchange told Insider there were 110 vessels at anchor around these ports over the weekend - a new record. Eighty of these ships were carrying containers.
For comparison, before the pandemic, the ports' highest record had been 17 ships waiting to anchor.
"The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor," Port of Long Beach Executive Director Mario Cordero said in the statement on Monday.
The news comes after the White House announced earlier this month the Port of Los Angeles would shift to a 24-hours-a-day schedule to help work through the backlog. The Port of Long Beach had already extended its working hours.
In an interview with CNN earlier this month, Gene Seroka, head of the Port of Los Angeles, said that Biden's plan was helping it to move through some of the cargo that had been sitting on the dock for several days.
"We had 25% of all cargo on our dock sitting here for 13 days or longer [and] that's been cut in just about half over the last week," he told CNN.
But experts have been skeptical about the impact, because the warehousing and trucking sectors are not following the same schedule.
"You can keep the ports open but if there are no trucks coming to pick-up or no warehouses open at 3 a.m., it's kind of a moot point," Brian Bourke, chief growth officer at logistics firm Seko, said in a recent conversation with Bloomberg.
Everybody needs to be in sync to solve the problem, he said. "Everything is connected ... that's why they call it a supply chain."