The Port of New York and New Jersey would implement a new quarterly container imbalance fee for ocean carriers as part of a multipronged effort to handle record cargo volumes spurred by the peak cargo season and a cargo shift from the West Coast, the Port Authority of New York and New Jersey announced on Monday.
The container management fee, targeting excess empty containers being stored in the port for long periods, will be effective from September 1, pending a mandatory federal 30-day notice period. The fee will reduce the number of excess empty containers dwelling at the port and free up much-needed capacity for containers that are full of imports and ready to be picked up by cargo owners, according to Port Authority chairman Kevin O’Toole.
The port has seen a cargo increase of nearly 12% year-to-date compared to the same period last year and a rise of 34% in cargo volume compared to the same period during pre-pandemic 2019. Despite two years of sustained record cargo growth, the port’s container terminals remained open throughout the pandemic amid national supply chain issues that have caused major disruptions at other ports.
As part of its ongoing strategic planning efforts to encourage all players involved in the cargo shipping community to make substantial capacity improvements elsewhere in the supply chain to accommodate this growth, the Port Authority is taking proactive steps as the East Coast’s largest container port prepares for what is traditionally its busiest annual period ahead of the US holiday shopping season, says O’Toole.
“As we continue to manage record cargo volume and work with our tenants and port stakeholders for the removal of empty containers in a timely manner, we call on all industry stakeholders to find sustainable, long-term solutions to an industry-wide problem affecting many US ports.”
The fee will be assessed on ocean carriers who do not evacuate empty containers that take up space for arriving imports and impede overall port productivity and fluidity. Under this new container management fee, which will be assessed on a quarterly basis, ocean carriers’ total outgoing container volume must equal or exceed 110% 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.
Fee proceeds will be used to offset the costs of providing additional storage capacity, and other expenses incurred by the glut of empty containers.