Delivery Information Alert: FMC Halts Hefty Port Congestion Surcharges

Congestion at West Coast ports, particularly the Ports of Los Angeles and Lengthy Seashore, has been a rising drawback for shippers and everybody concerned within the worldwide transport business.

The issue was made a lot worse when on Friday, carriers started asserting the fast implementation of Port Congestion Surcharges (PCS). By Monday (November seventeenth), carriers clear throughout the board had introduced they had been charging PCS.

Instantly, there was a backlash from shippers. Understandably annoyed at not having the ability to get cargo delivered in a well timed method from the ports, indignant shippers voiced complaints  that carriers had been charging big charges on transport containers that already had been on the water or delivered to ports.

The typical PCS carriers began hitting shippers with had been:

• $800 per 20′ container
• $1,000 per 40′ container
• $1,125 per 40′ HQ container
• $1,266 per 45′ HQ container

Many shippers went straight to the Federal Maritime Fee (FMC) with their indignant complaints about these big PCS.

The FMC responded with a launch titled “Port Congestion Surcharges” on Monday, November seventeenth wherein it states:

The Federal Maritime Fee is receiving quite a few inquiries relating to the congestion surcharges for “labor unrest” being carried out by ocean carriers as introduced in tariff guidelines required to be printed beneath the Delivery Act of 1984 and the Fee’s rules at 46 CFR Half 520.

Until finished pursuant to a waiver or exemption, any tariff rule (together with surcharges) of a standard service that leads to an elevated price to a shipper is probably not efficient sooner than 30 days after publication. 46 U.S.C. § 40501(e) and 46 CFR § 520.8. Many carriers beforehand printed of their tariffs advance or conditional discover of an intention to implement surcharges within the occasion sure situations are skilled. All such service tariff guidelines, nevertheless, have to be clear and particular as to the implementation and termination of the surcharge based mostly upon particular standards associated to “labor unrest.”

The Delivery Act and the Fee’s rules require that the principles relevant to any given cargo shall be these in impact on the date the cargo is obtained by the widespread service or its agent. 46 CFR § 520.7. Thus, if any labor disruption had been to happen at a port after cargo has been tendered by a shipper, a service could solely lawfully cost the charges in impact on the day the cargo is tendered.

The Fee continues to evaluation congestion surcharge guidelines printed in service tariffs and is gathering data from carriers relating to implementation of those surcharges.

I highlighted the 2 sections of the discharge that problem the carriers in charging the PCS as they’ve finished.

Yesterday, carriers started sending notices out that the PCS they had been charging have been suspended. Technically, the place we’re at is a postponement of PCS, not the cancellation of PCS.

Shipments which have already hit the water or ports is not going to be charged these big charges. Once more, it ought to be made clear that whereas it’s attainable that these PCS the carriers have been asserting is not going to go into impact in any respect now, we aren’t but to that time.

The beginning date of the carriers’ PCS has been challenged and altered. Principally, despite the fact that carriers filed effectively upfront for these PCS, implementing the fees after having obtained the products is unfair and has been stopped.

The FMC got here via massive for shippers right here.

The Journal of Commerce printed an article titled FMC’s Cordero questions port congestion surcharges wherein FMC Chairman Mario Cordero states the FMC’s place:

“The surcharges that carriers have introduced don’t apply, in our view, to cargo that’s on the water already, a lot much less cargo that’s already within the ports,” Cordero advised JOC.com. “If the cargo is was already in transit, the surcharge wouldn’t be relevant.”

However he stated the elemental query is whether or not carriers have met FMC necessities for “clear and particular” tariff or service contract provisions for the imposition of a surcharge. And not using a clearly outlined set off mechanism, imposition of surcharges could be “quite chaotic,” he stated.

Cordero stated the present surcharges seem like based mostly on carriers’ “observations or findings that there’s labor unrest or disruption or slowdowns.” He stated he has seen “no proof” that that is the primary motive for port delays. “Labor’s there, labor’s working, there isn’t any stoppage,” he stated.

Now the beginning date carriers can start implementing these giant PCS is for shipments departing on November twentieth, 2014.

Maybe the backlash from shippers and persevering with investigation/problem from the FMC will preserve carriers from implementing the PCS altogether. Language within the newest service bulletins regarding PCS contains phrases the place the carriers say they’ve determined to “droop this surcharge till additional discover”.

For now, Port Congestion Surcharges are delayed. Right here’s to hoping they find yourself cancelled altogether. In any other case, the under chart lists the quantities carriers introduced they’d be charging in PCS.

As all the time, Common Cargo Administration is right here as a good friend to what you are promoting, utilizing our practically 30 years of expertise as a freight forwarder to assist your cargo transport go as easily as attainable.