On August 1, the Port of New York and New Jersey (PANYNJ) announced a new container imbalance tariff to help tackle the growing problem of empty containers. Ocean carriers would be required to remove 10% more empty containers than their import quarterly total or incur fees. The port authority then set a 30-day public comment period on the tariff.
Ocean carriers of all sizes expressed concern, according to a blog post from the port authority, that the tariff’s blanket formula would have consequences antithetical to the seaport’s goal of removing containers. Some said they would have to bring in more empty containers to the port to meet the tariff’s 10% requirement. Others were concerned that prioritising empty containers on vessels leaving the port could result in US exports being left behind unintentionally.
In the meantime, ocean carriers that serve the port sent container vessels known as sweepers to remove empty boxes, and 10 such ships are already scheduled to visit the port in October. Other carriers reversed their ship schedules to visit PANYNJ last rather than first or rerouted vessels to return to the port after dropping off imports down the US East Coast in order to accommodate more empty containers.
Further, reports the port, some owners of empty boxes chose to scrap overly damaged containers by sending them to the port’s two tenant scrap metal yards or elsewhere to be sold for use as stores, makeshift classrooms or offices.
Since the invitation to provide feedback on the new tariff, the port has seen a 10.5% reduction of empty containers on property, which had accumulated to more than 200,000 since the start of the year. That allowed the port to move 24% more cargo during August compared with the same period in 2019. The port moved 843,191 teu that month, its busiest August ever.
Based on feedback from ocean carriers, the port authority drafted a revised structure for the container imbalance tariff effective October 1 that addresses their previous concerns. The new structure is based on a nuanced formula that provides flexibility for ocean carriers of all sizes, requiring them to balance the numbers of their import and empty boxes and allowing them to draw down any empty container imbalance at a quarterly rate with the goal of depleting all accumulation by the end of four business quarters.
“We’re extremely grateful that the ocean carriers recognized the need for their cooperation and stepped up to remove empties while they worked with us on the revised tariff structure,” said Bethann Rooney, director of the Port Department. “We continue to call on them to do more because we are still moving new monthly record volumes of cargo even after 25 straight months of record highs.”