News / Container terminals are becoming 'swamped' by large alliances, warns FMC

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Large ocean carrier alliances are contributing to port congestion, according to Federal Maritime Commissioner (FMC) William Doyle, speaking at the European Maritime Law Organisation’s (EMLO) Spring Seminar in Athens last Friday.

Commissioner Doyle said: “In my view, we could be experiencing some growing pains, not so much with the two or three company-sized alliances, but instead with the alliances that contain a larger number of companies.”

Citing the Asia – US west coast trade lane, which was badly affected by congestion and industrial action last year, and in the early part of 2015, Mr Doyle said the “disorganised” block loading of containers at load ports was a contributing factor leading to confusion at the discharge terminal.

“The containers are scattered all over the west coast terminals making it difficult and time consuming for the truckers and shippers to retrieve their cargo,” he said.

The four east – west trade vessel-sharing alliances consist of the 2M with two partners, the Ocean Three, the CKYHE with five carriers and the G6 with six member carriers.

It has been reported that the G6 alliance has the most complicated operation at the ports of Los Angeles and Long Beach, serving seven terminals at the San Pedro Bay port complex, with some of the members suffering above par extra costs during the peak of the congestion troubles.

The commissioner said the problem had been aggravated by ships not meeting their scheduled windows, “resulting in vessel bunching upon reaching the discharge ports”.

He added: “Once at the terminal, these new larger ships discharge cargo, one ship after the other – swamping the terminal.”

There is no doubt that an 8,000 – 10,000 teu ship co-loading for six carriers in Asia from four or five ports for discharge, at seven terminals on the US west coast, is an extremely challenging operation requiring a complex stowage plan.

As the so-called ‘grey’ chassis-sharing agreement has eased this particular pinch point at the LA / LB terminals, there have been calls for carriers to adopt a similar interchange of containers, especially among the large alliances.

However, although there are obvious benefits from this co-operation – assuming it would be able to clear regulatory hurdles – carriers are still reluctant to give up their only differentiating branding from the mega-alliance operations.

Meanwhile, Mr Doyle’s remarks follow the release earlier in the week of the FMC’s report on the escalating problem of detention and demurrage charges at US hub ports.

The FMC held port congestion forums in the second half of 2014 at Los Angeles, Baltimore, Charleston and New Orleans and heard complaints from importers, exporters and trucking companies that they were being obliged to pay demurrage and detention charges even though it was impossible to collect containers within the free period allowed.

One shipper told FMC staff that it had paid over $100,000 in demurrage charges over the preceding year compared with $10,000 for the previous 12-month period.

The ‘discussion paper’ will “help stimulate solutions to problems”, and Mr Doyle said he hoped that it would “entice the maritime community to resolve their differences on demurrage and detention without direct action being taken by the FMC”.