CMA CGM offers incentives to ease congestion at California’s ports

Source: Lloyd’s Loading List
Date: 30th November 2021

CMA CGM plans to offer incentives to importers to remove containers from terminals at Los Angeles and Long Beach.

The announcement came as the two US ports said they will further delay the implementation of the so-called Container Dwell Fee, citing a continuing reduction in the backlog of containers on marine terminals.

The punitive fee will not be considered before December 6, the ports said in a joint statement after meetings with US Port Envoy, ocean liner companies, and marine terminal operators.

Under the policy, carriers can be charged $100 for each import container remaining nine days or longer if moved by truck and six days or more if by rail.

Containers departing the marine terminals by trucks dwelled at the ports of Los Angeles and Long Beach for 7.64 days in October, up from 5.9 days in September, according to the Pacific Merchant Shipping Association.

CMA CGM is introducing an early container pickup incentive scheme at the two San Pedro Bay ports from December 1 and lasting 90 days.

The French carrier said the incentive of $100 per container for daytime collection and $200 at night and on weekends will be given to importers to offset costs incurred by “tensions” on their supply chains.

It will be provided to importers that collect their incoming containers from any of the 13 container terminals in Los Angeles and Long Beach in the first eight days of their arrival.

“By incentivising the movement of containers off the terminals and ensuring pickups can be made on nights and weekends at FMS, we will decrease truck turn times and expedite the flow of goods into the United States,” said CMA CGM and APL North America president.

Port of Los Angeles executive director said CMA CGM’s decision underlines the “strategic leadership and collaboration” needed during this historic cargo surge.

Chief executive of the Harbor Trucking Association, which represents drayage trucking firms in US west coast ports, said it is “encouraging to see an ocean carrier working towards creative incentives to get cargo moving, but empties are still a problem”.

Head of Strategy for Cargomatic, an e-platform that links shippers and drayage truckers, said we need such “bold actions” by ocean carriers like CMA CGM to help create more fluidity in the supply chain.

But he agreed that “the biggest issue” facing most truckers and shippers are the empty containers that are taking up limited yard space and chassis.

“The biggest thing we need to do is work with our partners to ensure that empty return restrictions are waived, and all import pickups can be paired with an empty return.”

“Issues around empty returns are causing driver, chassis and yard capacity constraints that create bottlenecks both inside and outside of terminals.”

In a further attempt to reduce dwell times of cargo on marine terminals at the two ports, the Federal Maritime Commission has announced details of a temporary suspension of its PierPass programme.

The FMC said it will allow “off-peak” users of marine terminal gates at the twin ports to be exempted from paying the Traffic Mitigation Fee from December 1 to the end of January next year.

While the San Pedro Bay ports continue to struggle with congestion, the port of Oakland said its containerised imports dropped 14% and exports declined 27% last month compared with October 2020.

The port attributed its cargo volume dip to declining vessel traffic, with 43% fewer ships calling Oakland last month than in October 2020.

Port officials said some ocean carriers simply bypassed Oakland and diverted ships directly to Asia following “crippling delays” at Southern California ports.

Marine Exchange of Southern California, which handles vessel traffic for the two San Pedro Bay ports, said there were 50 containerships “at anchor or loitering and awaiting orders or a berth” on November 29.

It said there were 15 mega-containerships over 10,000 teu at anchor or loitering and awaiting orders or a berth, with three ships more than 11,000 teu, five over 13,000 teu and two over 14,000 teu.

Despite the blockage in Southern California, shipping lines have slowly begun to restore Oakland vessel services suspended earlier in the year, with 61 vessel calls in October, compared with 54 in September.

Through the first ten months of this year, Oakland said its total cargo volume is up about 2% compared with the same period last year.

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