Port of Los Angeles, USA: High-Risk Response Strategies for Congestion and Container Demurrage Fees

As the largest container port on the U.S. West Coast and a core gateway for North American trade, the Port of Los Angeles handles 40% of the United States’ imported container throughput, processing over 18,000 twenty-foot equivalent units (TEUs) daily. It serves as a critical node for goods from China, Southeast Asia, and other regions to enter the U.S. market. However, since the 2021 global supply chain crisis, congestion at the Port of Los Angeles has become a regular issue. Data from the third quarter of 2024 shows that the average waiting time for ships to berth reached 7.2 days (peaking at over 14 days), and container yard utilization has remained above 92% for a long time (the reasonable industry threshold is 85%), far exceeding the port’s designed capacity. Congestion has directly led to a surge in “container demurrage fees”: according to statistics from the Port of Los Angeles Authority, the average demurrage fee incurred by enterprises due to container detention in 2024 reached \(1,200–\)2,500 per container, a threefold increase compared to 2019. For some urgent cargo, demurrage fees even exceeded 15% of the cargo’s own value. Based on the core causes of congestion at the Port of Los Angeles and practical experience from logistics enterprises, this article provides a set of actionable high-risk response strategies from three dimensions—”congestion prediction, process optimization, and cost control”—to help enterprises reduce the risks of supply chain disruptions and additional costs.

I. Analysis of Core Causes of Congestion and Demurrage Fees at the Port of Los Angeles

To develop effective response strategies, it is first necessary to understand the “structural contradictions” behind congestion at the Port of Los Angeles and the “transmission logic” of demurrage fees. Current congestion is not caused by a single factor but by the superposition of four factors: “cargo volume fluctuations, infrastructure bottlenecks, insufficient process efficiency, and external policy impacts.” Ultimately, through the chain of “yard overcrowding → delayed container pickup → stagnant container turnover,” demurrage costs are driven up.

(1) Four Core Causes of Congestion

1. Seasonal Fluctuations in Cargo Volume and Long-Term Growth Pressure

The cargo throughput of the Port of Los Angeles shows significant seasonal characteristics: the period from August to October each year is the “Christmas stock-up season,” during which imported cargo volume increases by 40%–60% compared to the off-season. In August 2024, the monthly throughput reached 985,000 TEUs, a yearly high, far exceeding the port’s designed daily handling capacity of 28,000 TEUs. In the long term, the United States’ dependence on Asian manufactured goods continues to rise (imports from China accounted for 38% of total imports in 2024), while the expansion of port infrastructure lags behind. Since 2010, the Port of Los Angeles has only added 2 new container berths, with an average annual growth rate of 2.1% in handling capacity—far lower than the 5.3% average annual growth rate of cargo volume—resulting in a “supply-demand imbalance.”

2. Poor Connection of Land Transportation Networks (“Last-Mile” Bottleneck)

The container distribution of the Port of Los Angeles relies on “port-railway-highway” intermodal transportation, but there are obvious shortcomings in two key links:

• Railway Transportation: The Southern Pacific Railway (SP) and Union Pacific Railway (UP), which connect to the port, handle 70% of inland distribution tasks. However, the processing capacity of railway marshalling yards is limited. In the third quarter of 2024, the average stay time of containers at railway yards reached 48 hours (the standard time is 24 hours), preventing containers in port yards from being transferred in a timely manner;
• Highway Transportation: Highways around the port (such as Interstate 710) see over 30,000 trucks pass through daily. However, the shortage of truck drivers is severe (data from the American Trucking Associations shows a shortage of 89,000 drivers in 2024), and the inspection process at port truck entrances is cumbersome (with an average waiting time of 1.5 hours), further exacerbating congestion.

3. Inadequate Yard Management and Digital Efficiency

Among the 28 container yards currently operating at the Port of Los Angeles, 15 are older yards with issues of “low storage density and poor digitalization”:

• Storage Efficiency: Older yards adopt a “ground storage” model, with an average stacking height of only 3 layers, while newly built automated yards (such as the TraPac Terminal) can stack up to 6 layers—doubling storage capacity. In September 2024, some older yards, due to saturated storage, had to temporarily store containers in parking lots around the port, increasing transshipment costs;
• Digital Lag: Only 30% of yards have implemented “real-time inventory visualization.” Enterprises need to inquire about container locations via phone or email, with an average response time of over 4 hours, leading to frequent adjustments to container pickup plans and further extending container detention time.

4. Policy and External Environmental Impacts

• Customs Inspection Efficiency: The U.S. Customs and Border Protection (CBP) increased the inspection rate for high-risk cargo (such as electronic products and textiles) from 8% in 2023 to 12% in 2024. However, customs inspection facilities at the Port of Los Angeles only increased by 3%, prolonging inspection waiting time from 24 hours to 36 hours;
• Extreme Weather Impacts: In the winter of 2024, continuous heavy rains in California forced the closure of some port terminals for 2 days, stranding over 50 ships. It took 14 days to resume normal operations afterward, creating a “congestion chain reaction.”

(2) Calculation Logic and Risk Transmission of Demurrage Fees

Demurrage fees refer to charges imposed by ports or carriers on containers that exceed the “free usage period.” At the Port of Los Angeles, demurrage fees are calculated in two categories: “terminal demurrage” and “container detention fees,” and the combination of both results in high costs:

1. Demurrage Fee Calculation Standards (Based on 2024 Rates of Major Carriers)

Example: An enterprise imports a batch of electronic products (one 40-foot high cube container). Due to yard congestion, the container is detained at the terminal for 8 days (3 days overdue). After pickup, due to delays in inland transportation, the container is not returned to the carrier until 12 days later (5 days overdue). Total demurrage fee = (\(150 × 3 days) + (\)120 × 5 days) = \(450 + \)600 = \(1,050. For high-value cargo (such as semiconductor equipment), if detained for more than 15 days, demurrage fees per container can exceed \)5,000.

2. Risk Transmission Chain

The “demurrage fee risk” caused by congestion is not isolated but amplifies through three links:

1. Yard Congestion → Delayed Pickup: Containers cannot be picked up from the terminal on time, triggering terminal demurrage fees. At the same time, this occupies the carrier’s container inventory, leading to a shortage of containers for subsequent use;
2. Delayed Pickup → Disrupted Inland Transportation Plans: Missing railway schedules or truck booking times results in cargo being detained in transit warehouses, further extending container usage time and triggering container detention fees;
3. Accumulated Demurrage Fees → Cash Flow Pressure: For small and medium-sized trading enterprises with 10 detained containers at the same time, monthly demurrage fees can reach \(10,000–\)20,000, accounting for 10%–15% of their monthly revenue and seriously affecting cash flow.

II. High-Risk Response Strategies for Congestion and Demurrage Fees: From Prediction to Implementation

In response to the congestion characteristics of the Port of Los Angeles, enterprises need to establish a full-process response system of “pre-event prediction → in-event optimization → post-event review,” combining port policies, digital tools, and resource integration to minimize risks. The following strategies have been verified in practice by large enterprises such as Walmart and Amazon, which can reduce demurrage costs by 30%–50% on average and shorten cargo turnover time by 20%–30%.

(1) Pre-Event Prediction: Accurately Monitor Port Dynamics and Plan Transportation in Advance

1. Use Official and Third-Party Tools to Real-Time Monitor Port Congestion Data

• Official Channels: Check the “Port Congestion Dashboard” released daily on the Port of Los Angeles Authority’s official website, focusing on three core indicators: ① Number of ships waiting at anchor (normal range: 5–10 ships; more than 15 ships requires vigilance); ② Yard utilization rate (adjust pickup plans if exceeding 90%); ③ Average container pickup time (activate alternative plans if exceeding 48 hours);
• Third-Party Tools: Subscribe to “port congestion early warning services” from logistics platforms such as Flexport and FourKites, and set up custom alerts. For example, when the expected waiting time for ships exceeds 7 days or the target yard utilization rate exceeds 92%, the system automatically sends email/SMS alerts, allowing adjustments to transportation plans 3–5 days in advance.

2. Off-Peak Transportation and Cargo Diversion to Alternative Ports

• Off-Peak Shipping: Avoid peak cargo volume periods such as the “Christmas stock-up season (August–October)” and “post-Spring Festival replenishment season (February–March).” If shipping during these periods is unavoidable, book cargo space on “off-peak days” (Monday and Tuesday), when port truck traffic is 20% lower than on weekends, resulting in more efficient container pickup;
• Cargo Diversion to Alternative Ports: When congestion at the Port of Los Angeles is severe, divert some cargo to nearby ports such as the Port of Long Beach or the Port of Oakland. The Port of Long Beach is only 32 kilometers away from the Port of Los Angeles, with an 8% lower yard utilization rate in 2024 and an average 12-hour shorter container pickup time. Although the Port of Oakland is farther away (600 kilometers from Los Angeles), its railway transportation connection is smooth, making it suitable for cargo destined for the northwestern United States and reducing demurrage risks.

3. Sign “Demurrage Fee Waiver Agreements” with Carriers

During the cargo space booking phase, negotiate with major carriers such as Maersk and COSCO Shipping to sign “customized demurrage fee agreements” and secure more favorable terms:

• Extended Free Usage Period: For long-term cooperative customers (with annual cargo volume exceeding 1,000 TEUs), extend the free usage period for import containers from 7 days to 10–12 days, and for export containers from 5 days to 7–8 days;
• Tiered Rate Discounts: Agree to charge 70% of the standard rate for the first 5 days after the free period. For example, if the original rate is \(150 per day, the discounted rate is \)105 per day, reducing initial demurrage costs;
• Emergency Waiver Clauses: If detention is caused by port force majeure (such as extreme weather or terminal strikes), apply for full waiver of demurrage fees. A written application and supporting documents (such as port closure notices and weather reports) must be submitted within 24 hours of the incident.

(2) In-Event Optimization: Efficiently Manage Cargo Flow and Reduce Container Detention

1. Digital Container Pickup: Improve Efficiency with the “Appointment-Based Pickup System”

Since 2023, the Port of Los Angeles has implemented an “Appointment System” for container pickup. Enterprises need to book pickup times (divided into three time slots: 8:00–12:00, 12:00–16:00, and 16:00–20:00) in the system 24–48 hours in advance and complete the following preparations to ensure smooth pickup:

• Information Verification: 12 hours before pickup, confirm the container location, yard number, and required documents (such as Bill of Lading/B/L and CBP Release) in the system to avoid pickup failures due to incorrect information;
• Vehicle Booking: Book trucks with “port access qualifications” in advance through port-cooperating truck dispatch platforms (such as Transflo), ensuring drivers carry valid IDs and vehicle registration certificates to reduce entrance inspection time;
• Priority Pickup Application: For time-sensitive cargo (such as fresh produce and pharmaceuticals), apply to the port for “priority pickup rights.” After approval, the pickup time can be shortened from 48 hours to 24 hours, with an additional fee (approximately \(200–\)300 per container)—far lower than demurrage costs.

2. Yard Management: Choose “High-Turnover Yards” and Avoid Older Yards

Among the 28 yards at the Port of Los Angeles, the following 5 are “high-turnover yards” (with high automation and fast distribution efficiency), which enterprises can prioritize:

Selection Recommendations: For time-sensitive cargo such as electronic products and clothing, prioritize TraPac or APM Terminals. Although yard fees are 10%–15% higher than those of older yards (approximately \(50–\)100 per container), they can reduce detention time by 2–3 days and lower demurrage risks. For bulk cargo (such as furniture and building materials), choose yards like YTI to balance cost and efficiency.

3. Inland Transportation: Optimize “Railway + Highway” Intermodal Transport to Shorten Cargo Transit Time

• Railway Transportation Optimization: Book “priority marshalling plans” with SP or UP Railway 7–10 days in advance to ensure containers enter railway marshalling yards within 24 hours after being picked up from the port, avoiding long waits. For cargo destined for inland hubs such as Chicago and Dallas, choose “double-stack container trains,” which shorten transportation time by 1–2 days compared to regular trains, with only a 5% increase in freight costs (approximately \(150–\)200 per container);
• Highway Transportation Optimization: Sign “exclusive transportation agreements” with local trucking companies, stipulating “24/7 on-call” services—ensuring trucks arrive within 1 hour after containers are picked up from the port to avoid empty waiting. At the same time, use “dynamic route planning tools” (such as Google Maps for Logistics) to real-time avoid congested sections of Interstate 710. For example, when I-710 is congested, take detours via Interstates 5 or 10. Although the distance increases by 15–20 kilometers, travel time can be reduced by 30–45 minutes.

(3) Post-Event Review: Summarize Experience and Optimize Subsequent Processes

1. Demurrage Fee Appeal: Collect Evidence and Secure Partial Waivers

If detention is caused by port or carrier issues (such as yard scheduling errors or incorrect B/L information), enterprises can submit an appeal within 7–10 days of fee generation, with a success rate of 40%–60%. The following materials are required for the appeal:

• Supporting Documents: ① Official port congestion reports (proving congestion is not the enterprise’s fault); ② Notifications of carrier or yard errors (such as B/L information correction letters or yard scheduling delay emails); ③ Cargo delivery time certificates (such as consignee receipts, proving delayed delivery is not the enterprise’s responsibility);
• Appeal Process: