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Houston Authorizes Fee for Loaded Imports to Reduce Dwell Time

Port Houston container dwell time fee
Port Houston approved implementing a dwell time fee for loaded imports to encourage reduced dwell time (Port Houston)

Published Nov 1, 2022 8:29 PM by The Maritime Executive

With no letting up of the surge in container volume passing through Port Houston, the Port Commission of the Port of Houston Authority authorized its first container dwell fee designed to reduce long-dwelling import containers sitting at the port’s two terminals. Houston joins other ports such as Oakland, California which reduced the free time for containers, and the Port of New York/New Jersey which is planning a container imbalance fee if carriers do not remove more containers than the offload. The Southern California ports of Los Angeles and Long Beach, however never implemented their long-dwell fee despite being authorized by the boards a year ago.

During the Commission’s regularly scheduled meeting on October 27, Executive Director Roger Guenther reported that Port Houston has yet to experience any softening in import loads. He highlighted September as the second-highest month in container cargo volumes, only slightly behind August.

Guenther said that staff had evaluated several options to improve Port Houston's cargo movement, including reviewing practices implemented by other U.S. ports to improve cargo fluidity. He told the commissioners that the staff concluded it would be reasonable to further incentivize the beneficial cargo owners or third party accepting the charge on its behalf to remove containers from the terminal and reduce dwell time.

“We’re kinda late to the party here,” Jeff Davis, Chief Port Operations Officer for Port Houston admitted. “A lot of the U.S. terminals have already done the same to handle the dwell,” he told the commissioners. He reported that the port has averaged seven to seven and a half days of dwell during the last quarter versus a historical average of three and a half days.

Effective December 1, 2022, a sustained import dwell fee will be implemented, and an optional
excessive import dwell fee has also been authorized for both the Barbours Cut Terminal and Bayport Container Terminal. The added fee will remain in place for at least 60 days with all loaded imports incurring a fee of $45 per day beginning on the eighth day after the expiration of free time and it is in addition to any demurrage charges incurred.

According to Port Houston, this new fee structure is aimed to help mitigate the issue of long-dwelling loaded import containers by incentivizing cargo movement. The fee will be assessed directly to the
Beneficial Cargo Owners.

In September, Port Houston handled 353,525 TEUs, a year-over-year increase of 26 percent. Loaded import container volume was up 31 percent in September over 2021 as ships continue to seek alternate ports to avoid the backlog on the U.S. East Coast and the potential for labor disruptions while the contract talks continue for the U.S. West Coast port. Port Houston said that overall container volume is up 18 percent year-to-date at its terminals and is nearing the three million mark already this year.