LA, Long Beach target 'ugly hazard' of containers left near ports as supply crisis drags on

With shipping delays mounting and cargo piling up at Los Angeles County ports, local officials are tightening the rules on lingering shipping containers that surround the docks, part of an effort to ease congestion of freighter ships anchored along Southern California’s coast.

Beginning Nov. 1, carriers will be charged $100 per container, with the fee increasing $100 per container per day — but the fee will not be assessed until Nov. 15.

Collected fees will be reinvested by the ports in programs to increase efficiency and address congestion, according to the announcement.

“This is not intended as a pass-on cost, rather it's intended as ‘let's move the cargo’,” Mario Cordero, Port of Long Beach Executive Director, said in a press conference on Wednesday. In an effort to ease the logjam, Long Beach recently relaxed rules that constrained the amount of cargo-staking at ports.

The global supply chain crisis has heightened the need for local ports to make room for bottlenecked cargo. “The terminals are running out of space. We need to make room in our terminals, approximately 530,000 container units are sitting on those waiting ships,” Cordero added.

In response, the Port of Los Angeles and Long Beach announced days ago that ocean carriers will be charged for every container that overstays their visit within the port complex: nine days or more if being moved by truck, and three days or more if being moved by rail.

Cordero said that “30 to 40% of the cargo on the marine terminals have been there longer than 9 days.”

‘We’re trying to protect our own’

Meanwhile, the lack of shortage space for containers has fed a major bottleneck at Southern California ports. Empty containers are piled up at truck yards, outside warehouses — and some are even dumped on the side of the road.

Truckers, however, insist it's a function of the port crisis, rather than negligence on their part.

“They are on the streets because nobody is receiving,” said Carlos Rameriz, a truck driver, in an interview with Yahoo Finance.

Drivers “don't care. They just drop it on the street. There's a bunch of empty containers on Washington Street because the [ports] have no place to put them and they get tickets, after tickets, I don’t know who pays for them,” Rameriz added.

Some of those empty containers are sitting on chassis’ because there’s no other space as Rameriz has described. The congestion has also caused drivers to idle with unattended trucking trailers because unloading containers from the ships has been “going pretty slow”, according to observers.

It’s become a vicious cycle as a flood of imports continue to swamp Southern California’s beleaguered ports ahead of the holiday. And with overflow at the ports, containers are finding their way to residential streets.

One accident in particular was the source of a scary sight for one neighborhood, after a shipping container flattened a car after falling off a truck. No one was injured but it happened in Wilmington, near the Port of Los Angeles, where the oceanic gridlock is leading to a similar effect on the streets.

“It's a very ugly hazard,” Vivian Martinez, a Wilmington resident, told Yahoo Finance in an interview.

Residents living near the ports have complained about the encroachment of containers and how trucks are backed up in the streets at all hours, even before Long Beach eased its zoning rules.

“They won't park here. We don't allow it. If they try to come through here, I'll go out with a trashcan or our cars, [it makes] the trucker go all the way back,” Martinez said.

Resident’s like Martinez have had enough of this long time problem that has exploded since the pandemic. Some have erected barriers on both ends of the street, with signs that say ‘No Trucks’ — the latest chapter in a crisis that stems in part from unintended consequences of local ordinances designed to allay residential concerns.

“We’re trying to protect our own,” Martinez added.

Officials have responded to these concerns by cracking down on businesses for stacking containers in violation of local zoning laws.

“Law enforcement has issued over 400 citations for illegally parked trucks with containers,” L.A. City Councilmember Joe Buscaino, told Yahoo Finance in a statement.

“My office is actively working with the Port of Los Angeles to identify viable parcels of Port owned land in industrial areas to store containers and conduct trucking operations away from neighboring residential areas,” Buscaino added.

Buscaino noted that he found some success in identifying parcels, and his next step is to identify an operator who can facilitate the organization of containers being processed at these new locations.

This follows Governor Gavin Newsom’s executive order that aims to ease the backlog. He directed government agencies to look for state-owned properties that could temporarily store goods coming into the ports.

Newsom asked the state's Department of General Services to review potential sites by Dec. 15, but it’s still unclear if L.A. will follow Long Beach’s lead in relaxing container stacking rules.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn