West Coast ports continue to face challenges, and the Port of Oakland in California is taking steps to mitigate these issues. As of today, July 1, the Port of Oakland will reduce the amount of tariff-free time import containers can spend dwelling in the port from seven to four days.
“We think the (demurrage) rates need to be higher to encourage cargo owners to move their cargo faster,” said Danny Wan, Executive Director for the Port of Oakland. “Our belief is that the rates are still low because customers are still using the terminals as storage facilities.”
The demurrage rates, as CNBC reported, are charged by the shipping lines and marine terminals once the maximum amount of tariff-free dwelling time has been surpassed.
The news source noted that this course of action is not a first for the West Coast, as two terminal operators at the Northwest Seaport Alliance of Seattle and Tacoma, Washington, have been charging long-dwell fees since November of last year.
“The average dwell in [the] Oakland terminal is now 9–12 days,” Wan continued. “It used to be 3–4 days. The 9–12 days incorporates rail dwell time because all rail cargo needs to be moved off the terminal to a near-dock rail facility.”
The Port of Oakland is reportedly experiencing the longest dwelling times for import containers. This coupled with a shortage of container-handling equipment at the Central Valley pop-up yards have created unique challenges for the port.
Deli Market News will keep you abreast of these challenges, so stay tuned.