Houston is Proceeding with Container Dwell Fee as Volumes Remain High
Port Houston continues to report strong increases in year-over-year container volumes leading port executives to announce that starting February 1, 2023, they will proceed with a Sustain Import Dwell Fee. Like many other ports, Houston has struggled to maintain fluidity at its Bayport and Barbours Cut Container Terminals and address long-term dwell times for some containers.
“The Sustained Import Dwell Fee is intended to minimize long-term storage of containers on the terminals and promote fluidity of cargo movement,” said Roger Guenther, Executive Director at Port Houston announcing their plans to go ahead with the new fee. “We’ve seen during the recent increase in demand that containers sitting on terminals for an extended period of time are a challenge. We are implementing this additional tool to help optimize space at our terminals and keep goods moving to the consumers in our region who need them.”
Port Houston will access a $45 fee per unit per day starting on the eighth day after the expiration of free time. This fee is in addition to the demurrage charges for loaded import containers and does not replace those charges. Fees will be the responsibility of the cargo owner.
The port had originally announced in October its plans for the new dwell fee structure which it said would help reduce the amount of time containers sit on terminal. The port however was forced to delay the implementation of the fees until it could make necessary software upgrades. An Excessive Import Dwell Fee was also approved in October by the Port Commission, and it can be implemented by Port Houston’s Executive Director as needed after providing public notice.
The port did not give an indication of December volumes but reported for November that it had another strong month handling a total of 348,950 TEUs. While it was down from October’s volumes, it was still up 11 percent year-over-year and the fourth-highest month ever for containers at Port Houston’s Barbours Cut and Bayport container terminals. Container volume is up 17 percent for the first eleven months of 2022.
“The long term for container growth in Houston is extremely favorable. Retailers continue to invest in distribution centers in our region that are served through our Port. The export of petrochemical commodities continues to rebound as well,” said Roger Guenther, Executive Director at Port Houston. He noted near term that the port’s vessel queue was declining and that they expected to be caught up in
the coming weeks.
Other ports that have also been successful in clearing their backlog of vessels have also abandoned plans for dwell time fees. The Ports of Los Angeles and Long Beach jointly announced in October 2021 that they would implement a dwell time fee if the carriers did not improve the flow of containers and make an increased effort to sweep empties from the terminals. The ports never implemented the fee and in mid-December reported that they have seen a combined decline of 92 percent in aging cargo on the docks. The San Pedro Bay ports will officially phase out the option to collect a container dwell fee as of January 24, 2023.