Carriers Suspending West Coast Surcharge


Seven carriers have decided to suspend the announced congestion surcharges for cargo moving via U.S. West Coast ports, that was supposed to enter into effect on November 17, 2014.

MSC, US Lines, OOCL, CMA CGM, UASC, COSCO and Evergreen Line said that they will suspend the surcharges until further notice.

The surcharges were intended to reach up to USD 1,000 per 40-foot container (FEU).

MSC said that it would reserve the right to implement the surcharges again with immediate effect, adding that it “recognized the concern in the market as to how this charge is applied.”

The decision comes in the wake of the US Federal Maritime Commission reaction to the congestion surcharges for “labor unrest” being implemented by ocean carriers.

Unless done pursuant to a waiver or exemption, any tariff rule (including surcharges) of a common carrier that results in an increased cost to a shipper may not be effective earlier than 30 days after publication,” FMC said on Monday.

According to FMC, all carrier tariff rules must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to “labor unrest.”

“The Shipping Act and the Commission’s regulations require that the rules applicable to any given shipment shall be those in effect on the date the cargo is received by the common carrier or its agent. Thus, if any labor disruption were to occur at a port after cargo has been tendered by a shipper, a carrier may only lawfully charge the rates in effect on the day the cargo is tendered,” FMC added.

The Commission explained that it was reviewing congestion surcharge rules published in carrier tariffs and was gathering information from carriers regarding implementation of these surcharges.

The congestion-hit Port of Los Angeles said that its overall volumes increased 4.6 percent in October 2014 when compared to last year’s figures. Total cargo for October was 715,682 Twenty-Foot Equivalent Units (TEUs).

Port Executive Director Gene Seroka said the port was continuing to work with its customers and logistics partners to relieve the current situation.

As a result of these efforts a new chassis distribution model is to be implemented on February 1.

Cargo container numbers rose 1.1 percent overall in October at the Port of Long Beach, compared to the same month last year, with congestion issues likely nudging some shipments into November. Still, the Port saw its busiest October since 2010, thanks to a rise in imports.

Source from : worldmaritimenews