Shipping companies announce container surcharge at ports

Starting Monday, some shipping companies will add a surcharge to container rates to make up for increased costs associated with congestion at West Coast ports — made worse the last two weeks by worker slowdowns.

 

By Coral Garnick, November 15, 2014, Seattle Times

 

 

Starting Monday, some shipping companies will add a surcharge to container rates to make up for increased costs associated with congestion at West Coast ports — made worse the last two weeks by worker slowdowns.

 

John Kim has had 15 containers worth of wood pellets sitting in rail cars in Tacoma waiting to be shipped to Korea since Nov. 3.

 

Each day those pellets have not shipped, Kim is paying a $1,000 penalty for the rail cars. He has to pay $12,000 to ship the containers in the first place, and he will have to pay an additional $300 each to finally ship the containers when port productivity picks back up.

 

“The problem just keeps getting worse,” Kim said.

 

The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA), which represents terminal operators and shipping lines at 29 West Coast ports, have been in contract negotiations since May that have lead to container traffic through the Seattle and Tacoma ports being reduced to almost nothing, causing backlash for truckers, growers, retailers and businesses throughout the region.

 

Last week, the PMA accused the ILWU of deliberately slowing down traffic by reducing container movement at Seattle and Tacoma port terminals to 10 to 18 per hour, from the usual 25 to 35 containers per hour. The two sides continue to blame each other for congestion at the ports, which spread to the ports of Long Beach and Los Angeles, and led to workers at the Port of Oakland walking off the job, according to the PMA.

 

Union spokesman Craig Merrilees has not disclosed what the sticking points in the contract negotiations have been. But he has mentioned the importance of access to training for new and different jobs as new technology is being used on the docks, as well as some changes in work allocation.

 

According to the PMA, full-time ILWU workers earn an average of $147,000 annually in wages, along with a hefty benefits package.

 

The new port-congestion surcharges will range from $1,000 for each imported container through Hanjin Shipping to $240 to $375 for exported containers through Evergreen Line and Hyundai Merchant Marine.

 

Blaine Calaway, vice president of sales at Calaway Trading, ships grains, forages and hay products through the Seattle and Tacoma ports destined for Asia as animal feed.

 

When he received multiple emails Friday from shipping companies announcing the surcharges, the severity of the slowdowns became even more clear to him, he said.

 

He said import loads into the terminals from overseas can reach costs of about $1,500 per container.

 

“Then tack on $1,000,” Calaway said, “that is cost to the consumers.”

 

With more than two-thirds of all U.S. international trade moving through West Coast ports, more than 100 organizations from farmers, wholesalers and retailers to transportation and logistics providers wrote to President Obama last week, seeking help to keep the slowdowns from escalating to a complete shutdown.

 

Administration officials said Friday they are confident that management and labor at the West Coast ports could resolve their differences “through the time-tested process of collective bargaining.”

 

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