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FMC wants ocean carriers to pay for container storage

The Port Authority of New York and New Jersey has announced a new “container imbalance fee” for ocean carriers to help clear long-dwelling empty containers during peak cargo season.

The port, the largest on the East Coast and second in the nation behind the Port of Los Angeles, has been bogged down by record cargo volumes as cargo shifts from the West Coast, where lingering congestion and ongoing labor negotiations continue to pose wildcards for importers. Figures released by the Port Authority show an average of 19 ships waiting at anchor for the week ending July 29, with average wait times are little over 4 days.

A glut of empty containers at the Port of New York and New Jersey have excacerbated congestion issues. Enter the container imbalance fee.

“The container imbalance fee will be assessed on ocean carriers who do not evacuate empty containers that take up sorely needed space for arriving imports and impede overall port productivity and fluidity,” the Port Authority of New York and New Jersey said in an update.

Under the program, which will be effective as of September 1, 2022, 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 the benchmark. Incoming and outgoing containers include both loaded and empty containers, but exclude rail volume. The fee will be assessed on a quarterly basis and proceeds will be used to offset the costs of providing additional storage capacity, and other expenses incurred by the glut of empty containers.

The imbalance fee is different from the ports of Los Angeles and Long Beach’s “container dwell fee,” which continues to be postponed, in that it charges ocean carriers for empty export containers, rather loaded import containers, and it’s a flat $100 fee, not a compounding daily fee as long as long-dwelling containers remain in port.

“The Port of New York and New Jersey is facing record import volumes, leading to empty containers accumulating in and around the port complex that are now affecting the regional supply chain that is already under stress from various sources across the country,” said Bethann Rooney, director of the Port Department at the Port Authority of New York and New Jersey. “We emphatically encourage ocean carriers to step up their efforts to evacuate empty containers quicker and at higher volumes to free up much needed capacity for arriving imports in order to keep commerce moving through the port and the region.”

Year-to-date, the Port of New York and New Jersey has seen cargo volumes rise nearly 12% compared last year and an astounding rise of 34% compared to the same period during pre-pandemic 2019.

“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 industrywide problem affecting many U.S. ports,” said Port Authority Chairman Kevin O’Toole.

In addition to the fee, the Port Authority has taken other steps to manage empty containers, including the repurposing of 12 acres within Port Newark and the Elizabeth-Port Authority Marine Terminal for temporary storage of empty containers and long-dwelling import containers, and is in the process of negotiating or investigating additional storage space.

“Our seaport has largely managed to avoid many of the national supply chain challenges affecting other U.S. ports due to our continued collaboration and communication with port partners and stakeholders. This new proactive container management approach is an example of our Port Department’s ability to identify and implement solutions before they cause logjams in our region,” said Port Authority Executive Director Rick Cotton. “We must use every tool in our toolbox to ensure that the flow of goods and business will continue as it has done throughout the pandemic thanks to the hard work of our waterfront labor and our partners.”

The Port Authority has opened a 30-day public comment period for new container imabalance fee, the details of which can be found on its website. The fee will be reassessed when the global supply chain crisis eases, or no later than September 2023.

Credit qCaptain by Mike Schuler

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