Ocean carriers are postponing congestion surcharges proposed in reaction to the ongoing ILWU and PMA labor discussions impacting West Coast ports.
It may be confusing, but in some cases it will be welcome confusion, as several container carriers that are members of the Transpacific Stabilization Agreement announced on Thanksgiving Eve that they are once again postponing or modifying congestion surcharges on cargo moving through West Coast ports.
The forwarder Mallory Alexander sent an email to customers Wednesday morning telling them to “please be advised, we have received information from several reliable sources that the TSA carriers shall indefinitely suspend implementation of the port congestion surcharge.”
Sara Mayes, president of Gemini Shippers Association, also said she has been receiving such notices.
Mallory is posting information about surcharges as it receives it at its website.
Alternatively, some other carriers may now be planning to impose the surcharge on only some West Coast ports and not others, but the plans are changing so quickly that even senior managers at some companies were unable to give definitive information.
“What a relief before you hit the road for Thanksgiving travel,” one 3PL executive told American Shipper. “We are receiving advisory letters from some ocean carriers about a postponement of the port congestion charge until further notice. Some Asian ocean carriers will decide whether to postpone it as soon as they open up tomorrow in Asia. I expect them to follow suit and make the reasonable decision.
“Does this mean that ocean carriers will give it up? No. They don’t want to,” he continued. “They will try to use it to increase rate level whenever there is a chance. After the Thanksgiving holidays, congestion is expected to get slightly worse. So ocean carriers may use this to re-assess the port congestion charge next week. Another possibility is they would rather focus on the Dec. 15 general rate increase instead of the port congestion charge.”
TSA had announced on Nov. 14 that some of its members were planning to impose surcharges of up to $1,000 per 40-foot container for cargo moving via U.S.
West Coast ports, effective Nov. 17, 2014, in response to
labor-related terminal delays.
Some carriers suspended the planned surcharges after an outcry by shippers and questions raised by the Federal Maritime Commission about the ability of carriers to impose surcharges on cargo already tendered by shippers. The FMC also questioned what evidence carriers would have to use to show that ports were, indeed, congested.
Many carriers then modified their plans for imposing surcharges, saying they would begin to impose them only on cargo received today or later.
Now on Wednesday, some carriers are postponing the surcharges once again:
* OOCL said today in a customer advisory it “has decided to indefinitely postpone the imposition of Port Congestion Surcharge (PCS) on all cargo entering the U.S. via U.S. West Coast ports or Canadian Gateway ports with immediate effect until further notice.”
* Evergreen, in a note dated Nov. 26, also said it “has decided to postpone the implementation of the Congestion Charge until further notice.”
The plan to postpone or modify surcharges follows a letter sent Wednesday by the National Customs Brokers and Forwarders Association of America, Inc., which added its voice to the chorus of shipper groups urging government officials to appoint a mediator to help the International Longshore and Warehouse Union and employers reach a contract settlement.
In the letter, NCBFAA President Geoffrey Powell urges five high ranking government officials to “use your good offices to appoint a mediator for the purpose of helping to resolve the outstanding issues that separate labor and the ocean carriers on the West Coast.”
He continued, “Without your assistance, the unsettled ocean shipping situation, together with its costly surcharges being imposed on U.S. importers, will be extraordinarily disruptive and result in significant economic damage to large and small companies alike.”
In the letter — which was sent to Penny Pritzker, secretary of commerce; Anthony Foxx, head of the Department of Transportation; and Jeffrey Zients, the president’s economic advisor and the director of the National Economic Council; Valerie Jarrett, a senior advisor to the president; and Mario Cordero, chairman of the Federal Maritime Commission — Powell highlighted the $1,000-per-FEU congestion surcharges
“With one exception, each of these ocean carriers are foreign-owned, and in each case, the surcharge, which has been uniformly established by those carriers at the level of $1,000 per 40-foot container (with some adjustments for differing size containers), would be imposed on and collected from U.S. importers and NVOCCs,” Powell wrote.
Powell said there was inadequate notification in apparent violation of the U.S. Shipping Act, possible collusive behavior in light of surcharge amount similarities; uncertainty created by the on again, off again imposition of the charges; and the possibility that much of the congestion is attributable to the carriers’ own conduct and inefficiencies.
“For our part, the NCBFAA has brought these specific issues to the attention of the Federal Maritime Commission, and we hope to work with that agency to address those issues that are within its jurisdiction,” he said.