The National Retail Federation on Jan. 7 sent a letter to
the Port of Long Beach expressing concerns about the port’s plan to reduce the
amount of time import containers can be stored for free on the docks.
Since 2005, the length of time containers can stay on the
dock – known as “free time” – has been four days. Beyond that, terminals are
charged storage fees. Port officials said last October that they’re proposing
changing free time to six shifts – the equivalent of as few as three days – in
order to encourage terminals to more consistently operate at night and move
imports off the docks faster.
The National Retail Federation’s letter, which was addressed
to the POLB CEO Jon Slangerup and Chief Commercial Officer Noel Hacegaba, was
signed by NRF Supply Chain & Customs Vice President Jonathan Gold. In the
three-page missive, Gold said that the NRF applauded the port’s efforts to
reduce congestion on the docks, but that it wanted to express its concerns
about the plan.
“Unfortunately we do not believe that reducing free time
from four days (essentially eight shifts) to just six shifts (three days) on
its own will address the ongoing congestion and throughput issues,” the letter
stated. “Reducing free time as proposed will only lead to additional congestion
and operational issues, and most importantly potentially additional costs to
NRF members by way of demurrage.”
Gold argues that without uniform shifts across the
terminals, determining the last free day will become a manual process, and that
this will render the current automated systems being used to determine the last
free day “useless,” because different terminals will have different shifts that
change weekly, the importer will be required to manually manage the last free
day for each container and bear the repercussions that this manual environment
will produce.
“The proposed calculation based on shifts could lead to more
congestion in the ports because of the uncertainty over the last free day,”
Gold wrote. “This uncertainty will lead to missed container pick-ups, resulting
in more containers trapped at the terminal.”
Among his proposed solutions to congestion: an increase in
terminal operating capacity, lanes and gates to support increased and improved
daily throughput.
A more balanced proposal, he wrote, would address the actual
congestion issues happening within the terminals. We would like to see the
terminals sharing in the financial responsibility for said congestion by, among
other things, paying drivers for their wait time at the docks.
The port says that staffers are working with stakeholders to
develop a final plan on the free time reduction that will be sent to its harbor
commission for consideration later this year.
