FMC seeking clarity from carriers on US West Coast congestion surcharges

Mark Szakonyi, June 25, 2014, Journal of Commerce

U.S. Federal Maritime Commission Chairman Mario Cordero today said the agency is reaching out to container lines for specifics on their planned congestion surcharges ahead of potential work stoppages at U.S. West Coast ports.


“What we want to make sure is that there is specificity [in congestion surcharges] because if you are a shipper, there seems to be an ambiguity of what the surcharge will be versus the triggering factor that applies,” Cordero told the JOC.


To prepare for potential International Longshore and Warehouse Union work stoppages, trans-Pacific carriers have filed plans for congestion surcharges or plan to reactive ones already on file with the FMC. With the current labor contract expiring at the end of the month, the ILWU and waterfront employers are negotiating a new contact, and both sides said earlier this month that talks were continuing and positive.


In a May 29 advisory notice, the FMC said congestion surcharge must be published in tariffs for at least 30 days before the fees can be levied against shippers. As tariff rules applying to work stoppages are already in place, if such an event occurs, a carrier could impose a surcharge with immediate effect, the agency said.


But more clarity is needed, said Ed Greenberg, counsel of the National Customs Brokers and Forwarders Association of America. The group wants 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. NCBFAA also want carriers to explain how they will divert cargo to and from alternative ports and where cargo may be held or transferred during the period.


Carriers should also provide a point of contact to give ocean transportation intermediaries updates on where their cargo is and when it will be delivered. Lastly, the FMC needs to form an internal clearinghouse on its website that would detail the timing and amounts of congestion-related surcharges facing the industry, Greenberg said.


While the agency is considering the requests, Cordero said the priority was for staff to get clarification on congestion surcharges from carriers. The NCBFAA in early 2013 first asked the agency to narrow the gap in information on congestion surcharges, following confusion on how the fees were implemented when hurricanes Sandy and Katrina hit.


“I would hope they take [the requests] seriously, but I haven’t seen it,” Greenberg said.


He said some FMC commissioners have raised concerns that the agency doesn’t have the regulatory authority. Greenberg thinks the FMC does have the authority and wants them to at least explore the option. U.S. Customs and Border Protection has been willing to work with the trade industry on the matter and has issued guidelines for ship and cargo contingency plans ahead of possible U.S West coast port disruption, he said.


“Customs is willing to work with the trade. Why can’t the FMC?” Greenberg asked.

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