US ports in Los Angeles and Long Beach to begin fining freight companies for delays
US ports in Los Angeles and Long Beach will begin fining freight companies today for prolonging shipment of containers to reduce port backlogs.
Ocean carriers will be charged $100 per container, with the fines increasing in $100 increments daily, per container, depending on whether it will be moved by truck or rail. Ships currently must wait an average of 10 days offshore to unload containers due to the ports’ inability to manage the rise in global shipping traffic caused by the pandemic. Los Angeles and Long Beach handle 40% of all US imports.
The policy was created in partnership with the White House and the US Department of Transportation, to address lagging US supply chains caused by shipping slowdowns. The strategy looks to target the stresses weighing on the supply chain at multiple pressure points.
Expect the fines to aggravate freight shipping companies, who blame the backlog on outdated and unequipped port infrastructure. Nevertheless, other large ports like New York will likely follow suit and introduce similar fines as supply chains continue to buckle. The fines are unlikely to significantly reduce supply chain stress in the long-term because increased port infrastructure is still the most effective solution to reducing delays.
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