FMC’s Cordero questions port congestion surcharges Federal Maritime Commission Chairman Mario Cordero said ocean carriers’ West Coast port congestion surcharges shouldn’t apply to cargo already in transit, and that the FMC will examine whether there’s a “solid basis” for the charges. “For us, the $64,000 question is, ‘What is the trigger? What’s the basis that will allow them to charge a surcharge?” Cordero told JOC. “That’s the threshold question. That’s the interesting question we at the FMC have to look into. Our staff is looking into whether there’s a trigger mechanism that is legitimate to even apply the surcharges,” he said. Cordero, a former Long Beach port commissioner, said he’s not convinced that carriers’ citing of “labor unrest” is specific enough to justify hefty congestion surcharges that most trans-Pacific carriers filed months ago and activated Monday. The FMC late Monday posted a notice on its website advising that the surcharges “must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to ‘labor unrest.’” The notice expanded on a a May 29 FMC advisory stating that surcharges would apply only to disruptions that happened after a shipper tendered its cargo to the carrier. “The surcharges that carriers have announced do not apply, in our view, to cargo that’s on the water already, much less cargo that’s already in the ports,” Cordero told JOC. “If the cargo is was already in transit, the surcharge would not be applicable.” But he said the fundamental question is whether carriers have met FMC requirements for “clear and definite” tariff or service contract provisions for the imposition of a surcharge. Without a clearly defined trigger mechanism, imposition of surcharges would be “rather chaotic,” he said. Cordero said the current surcharges appear to be based on carriers’ “observations or findings that there is labor unrest or disruption or slowdowns.” He said he has seen “no evidence” that this is the main reason for port delays. Labors there, labors working, there is no stoppage, he said. Most trans-Pacific carriers filed required 30-day notice of possible congestion surcharges last by May, more than a month before the July 1 expiration of the West Coast longshore labor contract between the Pacific Maritime Association and the International Longshore and Warehouse Union. With delays worsening and the PMA and ILWU still at loggerheads, several carriers last week announced that they would activate the surcharges for imports arriving in port and exports arriving at terminal gates on or after Monday. Angry shippers have deluged the FMC with complaints. Cordero said he spoke Monday with a Texas shipper who asked how carriers could suddenly levy a congestion surcharge for containers stuck inside a gridlocked port terminal. Carriers contend they met the 30-day notice requirement for imposing new charges when they filed the potential surcharges months ago, and that they can activate the charges immediately. Cordero said that’s an issue that merits FMC scrutiny. Shippers also have complained about the amounts of the surcharges, which in many cases are more than half the basic per-container rate under service contracts. Cordero said he didn’t want to prejudge whether the surcharge levels are reasonable, and said that’s a secondary question. The primary issue, he emphasized, is whether the surcharges meet FMC requirements to be “clear and definite.” Cargo interests and truckers in Los Angeles-Long Beach and other major ports, including New York-New Jersey and Virginia, have complained about demurrage bills for containers they’ve been unable to pick up on time because of congestion at terminals. Demurrage was brought up repeatedly during four recent FMC hearing on port congestion. Cordero said the demurrage will be one of the issues FMC staff will address in its report on the hearings. Port congestion has become a front-and-center issue for the FMC, whose mandate includes fostering an efficient, reliable ocean transportation system. Earlier this month, Cordero spent a day at Los Angeles-Long Beach, the busiest U.S. container port gateway. He said the issue of long truck queues and slow turn times is “very real.” He said he counted 177 trucks lined up outside a terminal at 2:30 p.m. Cordero said he stands by his previous recommendation that PierPass waive its weekday truck-gate fees, which subsidize operation of off-hour gates designed to minimize peaks in traffic flow. His proposal has gotten little traction. However, Cordero said it might help relieve congestion at truck gates -- and that even if it doesn’t, it will spare shippers from being charged extra while their truck drivers endure slow turn times. JOC NEWS - NOV 17 2014
Posted on: Tue, 18 Nov 2014 04:15:34 +0000
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