Shippers should carefully read the surcharge notices issued by container lines in the past two weeks in response to a potential longshoremen's strike and port closure on the East and Gulf coasts to understand when the fees go into effect for particular shipments, Peter King, director of the U.S. Federal Maritime Commission's Bureau of Enforcement, said Monday.
The International Longshoremen's Association has threatened to walk off the job manning cargo terminals on the eastern seaboard and in the Gulf unless a new long-term master contract can be agreed on with terminal operators. The current contract expires on Sept. 30.
Talks abruptly broke off Aug. 22, but are schedule to resume Sept. 17 with the help of a federal mediator.
The surcharges, which range from $500 to $1,000 per 40-foot box
, apply to inbound cargo at all U.S. ports, and in some cases to ports in Mexico and Canada as well. Most of the surcharges go into effect between Oct. 1 and Oct. 5, although Yang Ming and Maersk Line say they will start collecting the fees on Sept. 26 and Sept. 30, respectively. The carrier's rationale for the special fees is that shippers will divert cargo to ports unaffected by the labor disruption, causing capacity constraints for their vessels, ports, railroads, transload centers and trucking companies. Carriers will have to spend a lot of resources to find alternative transportation if supply is tight, and incur storage and other costs. And carriers that opt to head to East Coast ports in hopes that a strike will be averted or short-lived will have to anchor offshore and lose transport revenues until ports reopen.
King said surcharges that were filed on or about Aug. 30 with the required 30 days notice for cargo that will be discharged on or after Oct. 1 will be valid for all cargo that the carrier receives at origin after the filing date. Cargo dropped off at a foreign port prior to a published notice, but that is already on the water and arrives in the United States on or after the effective date of the notice is not subject to the fees.
"The effective date of the rate rule says those rules can only apply to cargo received on or after the date of publication. So you need to go back and see when did they publish," King told transportation intermediaries at the National Customs Brokers and Forwarders Association of America's annual government affairs conference in Washington.
"If (the carriers) start quoting you what they think the rule says, ask for it. Get a copy of the rule," he recommended.
Some carriers started publishing port congestion surcharges in June and kept rolling the effective date forward until the labor situation worsened.
MOL was the last carrier to file a surcharge notice and its fees will be effective on Oct. 7. The only carrier that has not published any notice of surcharges is Hapag-Lloyd, King said in a follow-up interview.
He told American Shipper
all the carriers that filed notices of surcharges for inbound cargo have also filed paperwork to issue surcharges for outbound cargo, too.
Thomas James, president of John S. James Co., a customs broker and forwarder based in Savannah, Ga., complained during the session that carriers "are probably not going to charge these to Wal-Mart, Home Depot or Target, but they are going to charge it to me, who may have 20 TEUs. We don't think that's fair. And therefore, if its unfair, we think it should be illegal.
"We'd like you to look at that," he asked.
"We can't blame somebody if they want to charge $10,000, that's their business. But if they declare it's going to be across the board, then it needs to be across the board and there shouldn't be any rebating done in Hong Kong or whatever," he said.
The ILA and the U.S. Maritime Alliance, which represents carriers and terminal operators, are at odds over several issues.
The union wants to limit the amount of automation used to lift containers, preserve its right to maintain trailer chassis as ocean carriers farm out equipment management to third parties, retain a royalty system for box moves and weigh containers to make sure they are not overweight and shortchanging members from royalties. Management's top priorities are automation and doing away with work guarantees and other rules it says are remnants of a bygone era before containerization when more workers were needed to manually load and unload crates and bales. - Eric Kulisch