Freight Snaps

Amazon Concerns About Demurrage Charges In California Port

According to officials’ announcements from the Port of Los Angeles & Port of Long Beach, carriers will be fined if their containers stagnate too long at the terminal. Afterwards, the National Shippers Advisory Council (NSAC) held the meeting, and members included Amazon, Walmart, and Target. 

However, you can tell that these council members complained about this policy ‘a lot’.

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‘The fee will pass along to shippers.’

The fee will rise by $100 every day. Although it will be charged to carriers at first, it may eventually be passed along to shippers. Moreover, this may even lead to higher freight rates which is the last thing we want.

“I’m concerned that this new fee is going to cause even more problems than it’s going to solve.”

Steve Hughes, representitive in the Motor Equipment & Manufacturing Association

‘What will happen to American consumers?’

Because of the port congestion and overloaded supply-chain chaos, Americans have suffered from skyrocketing price levels already. Nevertheless, this potential risk may add on freight rates significantly, resulting in even more difficulties for retailers to import commodities.

“What was done this week at the ports of Los Angeles and Long Beach is effectively an indirect tax on the American consumer.”

Ken O’Brien, president of Gemini Shippers Group

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‘Is this policy even HELPFUL?’

Although the Biden administration strives to tackle the port congestion chaos by the “90-days sprint”, there are tons of containers still piling up on the dock and cargo ships queuing to berth. Actually, everyone has the intention to unclog the terminals quickly, but the ugly truth is that they physically can’t, not just with the extra charging penalty.

“In its current state, the way supply chains are moving right now, I don’t think detention and demurrage are incentivizing anything.”

Adnan Qadri, director of global imports at Amazon

Apparently, it’s highly argued that demurrage charges in California port are effective.

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