Forwarders ask FMC for Congestion Surcharge Clarity

Posted on 6/11/2014 by SuperUser Account

Customs brokers and forwarders are asking the U.S. Federal Maritime Commission to create procedures to help them better handle potential work stoppages at U.S. West Coast ports.

WASHINGTON — Customs brokers and forwarders are asking the U.S. Federal Maritime Commission to create procedures to help them better handle potential work stoppages at U.S. West Coast ports.

Although the FMC in late May issued an advisory on possible port congestion surcharges levied by carriers, the tariff publications and
announcements published so far don’t provide enough clarity to the shipping community, the National Customs Brokers and Forwarders Association of America wrote in a June 5 letter. Trans-Pacific carriers have filed plans for congestion surcharges or plan to reactivate ones already on file with the FMC in the event that the International Longshore and Warehouse Union exercise work stoppages amid contract negotiations with waterfront employers.

Carriers’ planned congestion surcharges, however, “are so indefinite as to be inconsistent with the commission’s regulations pertaining to the need to provide the public with accurate, reliable and useful information concerning the charges to be assessed,” Ed Greenberg, counsel for the NCBFAA, wrote FMC Chairman Mario Cordero.

Greenberg asked the FMC to require trans-Pacific carriers to publicize how they would provide services to and from U.S. ports if work stoppages on the West Coast occur. Carriers should explain how they will divert cargo to and from alternative ports and where cargo may be held or transferred during the period and provide a point of contact to give ocean transportation intermediaries updates on where their cargo is and when it will be delivered.

The FMC should also create an internal clearing  house on its website that would detail the timing  and amounts of congestion-related surcharges facing the industry, Greenberg said. He pointed to how a lack of central place for the industry to gain such information caused “significant additional costs, confusion and concern” for OTIs and shippers when the Hurricanes Sandy and Katrina hit supply chains.

Greenberg said the proposed congestion surcharges made by Hapag-Lloyd, Zim and United Arab Shipping exemplify the ambiguities regarding how the additional fees would be levied if work stoppages occur. Hapag-Lloyd said it would impose congestion surcharges “in the event of labor unrest” on June 10 for all import and export cargo arriving at U.S. locations whether for direct services or diversion through Canadian and Mexican ports. Zim published a notice, effective December 2012, saying it would impose congestion surcharges on import cargo coming from Asia if there was any “labor unrest,” while UASC said it would impose a congestion surcharge May 20 on all import cargo if U.S. labor unrest causes terminal congestion.

“None of these publications give the shipping community adequate or reasonable notice whether a surcharge will be actually imposed, the circumstances that would trigger the imposition of any such surcharge, or the proposed duration of such charges,” Greenberg said. “Nor is it clear whether the surcharge would be imposed on cargo that was either booked or already in transit prior to the carrier’s decision to begin assessing the charge.”

Lastly, the FMC should require carriers and marine terminal operators to create disruption-related demurrage and detention tariffs that would eliminate the charge against shippers and OTIs during the period of unrest, NCBFAA said, or at a minimum eliminate penalties. The group doesn’t believe it’s fair to penalize shippers and OTIs for not being able to move their containers off the pier or for not returning them because of disruptions caused by labor tension and severe weather.

NCBFAA asked the FMC to take similar measures to help OTIs and shippers to prepare for labor and weather disruptions in early 2013. But the association said it hasn’t heard back from the agency, nor has it seen the FMC  take step to address such concerns. NCBFAA, based in Washington D.C., represents more than 970 forwarders, customs brokers, ocean transportation intermediaries (OTIs), non-vessel operating common carriers and cargo agents, which serve more than 250,000 importers and exporters.

Contact Mark Szakonyi at and follow him on Twitter:@szakonyi_joc.

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