Click here for “West Coast Ocean Cargo Congestion: Facts And Remedies,” Carlos Rodriguez’s original article.
The below surcharges were to have been implemented effective November 17, 2014 by ocean carriers for import/export traffic through the West Coast ports:
There was a loud outburst by shippers and shipper groups, and the Federal Maritime Commission, as did we, questioned the legality of applying the surcharges to cargo already in ocean carriers’ systems either at origin, in route, or at West coast destinations. By the end of the next day, November 18, 2014, the following ocean carriers (there may be others) had sent notices to importers/exporters withdrawing the Congestion Surcharge immediately:
- YANG MING
- HAPAG LLOYD
(COSCO and APL never filed Congestion surcharges.)
Updated Conclusions. The underlying issues related to the ILWU/PMA are still not resolved, and, of course, nothing has changed, nor likely to change anytime soon with regard to the availability of chassis. Importers/exporters are wondering that now that ocean carriers seem to be backing off tariff-supported Congestion surcharges, if the ocean carriers will be issuing force majeure notices pursuant to service contract provisions to get relief for what ocean carriers are characterizing as union issues. When the ILWU/PMA negotiations are successfully terminated, there definitely will be relief visible in the Ports of Oakland, Tacoma, and Seattle, where union actions have been more pronounced. However, when the union dust settles, there will then be a refocus on the chassis issue. We still believe that in the future, shippers should be especially sensitive to the allocation of risk in the context of equipment shortages, in particular, those relating to chassis availability and resulting demurrage. We do not see the congestion/demurrage problems disappearing soon.
For additional information, please contact Carlos Rodriguez or Joe Orlet.