News / BAL claims terminal $8.8m congestion surcharges were 'unfair'

Photo: VesselFinder

Bal Container Line is seeking $8m in damages from SSA Terminals after filing a complaint with the US Federal Maritime Commission over “unjust surcharging” .

Having entered into a four-vessel specific agreement with SSA for services at Long Beach, BAL claims it was charged a $100 a day per box congestion fee between August and October 2021, amounting to $8.8m.

While the contract specified the carrier “agrees to pay 100% demurrage per the port tariff plus an extra $100 per unit per day for terminal congestion fee”, Bal believes the charges were unjustly applied.

“The congestion fee is unjust and unreasonable because the mere one sentence notice does not contain the required information in order for it to be ‘clear and definite’. The event or condition that (1) trigger and (2) would terminate the surcharge must be clearly identified. Otherwise, the FMC can initiate enforcement actions for improperly established tariffs.

“SSA’s congestion fee charge did not state a purpose. The triggering event that would terminate the charge was also not clearly identified.”

Added to this, the carrier noted that SSA’s congestion fee charge did not clearly identify any tariff stating the congestion charge, while further noting that the terminal operator continued to charge the fee despite placing Bal’s boxes in an “’inaccessible’ area in the terminal”.

Originally an intra-Asia focused NVOCC, Bal, like others, was enticed into the transpacific and Asia-Europe trades in 2021 by historically high freight rates. Having launched transpacific services, it handled 68,244 teu and 100,050 teu in 2021 and 2022 respectively.

In June last year it added to its services with the signing of a 12-month slot-charter agreement with Transfar’s service between China and the US west coast and Mexico.

But, less than a year later, it found itself struggling to find the demand that had prompted it into the market and, tellingly, did not fulfil any shipments itself in the first four months of this year.

Its claim against a terminal operator marks something of a first for the FMC, which typically handles complaints by shippers against their carrier partners.

Given Bal had contractually ‘consented’ to the $100 charge, shipping consultant Mike Wackett told The Loadstar: “BAL was one of a string of Asian-based ‘disrupter’ carriers attracted into the transpacific by unprecedented hike in freight rates. Stevedoring contracts would have been rushed through, and it begs the question whether there was sufficient time for due diligence.”