After blaming a backlog of containers at the port for contributing to the congestion and delays, the Port Authority of New York and New Jersey has delayed the implementation of an “imbalance fee” that it planned to start charging carriers as of September first. The port remains committed to the concept but reports that it will revise the approach before implementing the fee in the fourth quarter of 2022.
Announcing the plans for the fee at the beginning of August, port executives said that their facilities were facing record import volumes and that empties were accumulating in the port and on average were staying in the yards for around 30 days. Cargo volumes were reported to be up 34 percent compared to the same period in 2019 before the pandemic and nearly 12 percent year to date versus 2021. In 2022, they reported an imbalance of over 200,000 containers moving through the Port of New York and New Jersey facilities.
While other ports including Los Angeles and Long Beach proposed fees based on dwell time, the Port Authority of New York and New Jersey’s fee is to be assessed quarterly based on a ratio of incoming to outgoing boxes. Ocean carriers’ total outgoing container volume must equal or exceed 110 percent 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. Incoming and outgoing containers include both loaded and empty containers, excluding rail volume.
After touring the port at Newark, the chairman of the Federal Maritime Commission Daniel Maffei expressed support for the concept saying that the carriers’ imbalance was creating an untenable situation for terminals, importers and exporters, trucking companies, and ports. Maffei repeated an often-heard call for carriers to move their empties and went further suggesting carriers might be required to compensate truckers for storing the carriers' equipment.
The decision to defer the imbalance fee was made according to a report on CNBC after port officials had numerous discussions with ocean carriers. CNBC said that the meetings had “turned up what port officials described as unforeseen circumstances.” Reports said that the meetings with the carriers identified unanticipated consequences of the fee plan that need to be addressed.
Los Angeles and Long Beach have yet to implement their dwell time fees. Executives in both ports said after announcing the fees and consulting with carriers, the shipping lines had been successful in reducing the numbers of empties and reversing the trend of increasing dwell times. The ports continue to jointly review the dwell time statics and the numbers of empties in their yards deciding that they can continue to defer their planned fees.
The Port Authority of New York and New Jersey reports that carriers were engaged in the discussions and were working to reduce the backlog of containers at its terminals. The current plan calls for revising the approach to the imbalance fee and starting it in the fourth quarter with the first invoices issued to carriers in January 2023.
