CMA CGM’s incentive to ease congestion at California ports
Shipping and logistics company CMA CGM will implement an incentive program at the ports of Los Angeles and Long Beach to improve the fluidity of the largest import gateway in the U.S.
Said to be in line with the objectives of the Biden-Harris Supply Chain Task Force, the Early Container Pickup incentive program will be effective on 1 December and continue for 90 days.
As explained, the incentive will be provided to the importers that pick up their container via merchant haulage from all the terminals in Los Angeles and Long Beach in the first eight days, with the intent to use it for offsetting costs incurred by tensions on their supply chains.
The incentive includes $100 per container for daytime pickup from Monday to Friday and $200 per container at night and on weekends.
According to CMA CGM’s estimates, this commitment could exceed $22 million over 90 days.
In addition to the incentive program, CMA CGM intends to financially support the Fenix Marine Services (FMS) terminal in expanding its hours of operation so the containers can be picked up day and night seven days per week.
Since the beginning of the pandemic caused by COVID-19, the company added 14 extra loaders and increased the number of available chassis by five times, CMA CGM said.
“The CMA CGM Group is committed to doing everything we can to assist in improving overall supply chain velocity in southern California”, said Ed Aldridge, president of CMA CGM and APL North America.
“By incentivizing 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”.
As reported earlier, the ports in southern California are suffering from severe congestion and decreased freight movement across all modes of transport, leading to long container dwell times.
In efforts to tackle this issue, the harbour commissions of ports of Los Angeles and Long Beach approved the policy under which ocean carriers will be charged for each import container that falls into one of two categories:
- In the case of containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more;
- For containers moving by rail, ocean carriers will be charged if a container has dwelled for six days or more.
The ports decided to charge ocean carriers in these two categories $100 per container, increasing in $100 increments per container per day until the container leaves the terminal.
However, so far, the twin ports have delayed consideration of the container dwell fee three times.
On 29 November, the ports said the fee will not be considered prior to 6 December after meetings with the U.S. Port Envoy John Porcari, ocean liner companies and marine terminal operators.
The twin ports reported a decline of 37% combined in ageing cargo on the docks ever since the announcement of the fee on 25 October.
The executive directors of both ports informed that they will reassess fee implementation after another week of monitoring data.