News / TSA carriers reapply cancelled surcharges for congested US west coast ports

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After withdrawing port congestion surcharges last Wednesday – two days after they had been implemented – ocean carrier members of the TSA are preparing to reinstate them for troubled US west coast facilities.

Carriers in the Transpacific Stabilisation Agreement cancelled the surcharges to be applied on all cargo following a challenge from the US Federal Maritime Commission on their legality.

The FMC argued that the surcharges couldn’t be applied to cargo already in transit and on the water. There was also strong criticism from shippers’ councils.

The carriers appeared to back down and a customer advisory from MSC announcing the cancellation of the surcharge said: “We recognise the concern there is in the market as to how this charge is applied.”

But it added that the line reserved the “right to implement again with immediate effect”.

And now, according to a customer advisory from Evergreen, seen by The Loadstar, and anecdotal reports from shippers, it seems that the carriers intend to reintroduce congestion surcharges of around $800 per 20ft and $1,000 per 40ft to shippers – but  significantly, only when export cargo is received on the quay either in Asia or the US.

This may not be the end of the story, however, because the FMC said it intended to investigate the cause of the congestion, which has impacted the two biggest US gateway ports of Los Angeles and Long Beach and led to waiting times of several days for ships at anchor in San Pedro Bay.

The justification given by carriers for the surcharge is that the congestion is a direct consequence of “labour-related terminal delays”, but FMC Commissioner William Doyle said last week that ocean carriers had had “a substantial hand in the formation of port congestion”.

Commissioner Doyle said that, in his view, there were three reasons causing congestion at US west coast ports: the use of bigger ships on the tradelane causing volume surges; the decision by carriers to no longer provide chassis; and the bunching of vessels caused by poor schedule integrity.

He believed “ocean carriers should not be adding surcharges for port congestion under any circumstance, now or in the foreseeable future”.

Meanwhile, following the expiration of the labour contract on 1 July, negotiations for a new deal between the terminal operator and shipping line representatives and the International Longshore and Warehouse Union have stalled and are unlikely to resume until after the Thanksgiving holiday in early December.