Transportation

On February 23, 2024, the Federal Maritime Commission (FMC) issued a Final Rule intended to add clarity to invoicing requirements outlined in the Ocean Shipping Reform Act of 2022 (OSRA 2022). In particular, the Final Rule provides minimum information for demurrage and detention (D&D) invoices and procedures for disputing charges. D&D invoices have created a host of issues for importers and shippers throughout the economy, especially as they relate to the lack of information provided on the invoices.

  • Many of the rate hikes represent almost a 100% increase in shipping rates
  • The special permission is not only to increase the rates and charges, but these increases are effective immediately as they also waive the FMC’s required 30-day notice period for increasing rates
  • Absent significant military or diplomatic action, our expectation is that these circumstances will not disappear quickly

The Federal Maritime Commission (FMC) has granted special permission to ocean carriers to immediately increase the rates on containers that are being rerouted around the Cape of Good Hope in Africa or are retaining feeder vessels for pickup of cargo at high-risk ports in the Red Sea due to increased hostilities. Since mid-November 2023, Houthi rebels based in Yemen have attacked Red Sea shipping bound for Israel or linked to Israeli ports. Reported security incidents have ranged from outright attacks, approaches, and business interruptions to mere sightings.

Some commercial truck traffic could be moving again at one border bridge as late this afternoon. On April 14, 2022, Texas Governor Greg Abbott announced an agreement with Nuevo León Governor Samuel Alejandro García Sepúlveda for heightened inspections on Mexico’s side of the border at the Columbia bridge and the lifting of increased security measures…

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Don’t Forget the Chassis in the Chase for the Cure.

A new level of frustration has arisen from the ocean shipper ranks during this “post-COVID” period. Shipments from Asia to the U.S. are experiencing extreme difficulties in getting their cargo delivered, mainly due to the acute shortage of chassis to effect delivery of their containers on the U.S. side. The painful example of this is the BNSF current experience with Lot W. Aside from the impact to the importer in not being able to access its cargo and experiencing serious damage to its business, it is also likely to face serious demurrage charges from the ocean carrier. This is on top of having just experienced a quadrupling (or more) of the base FAK per container rates, and the ocean carrier choices to leave agricultural commodities sitting at West Coast U.S. ports, favoring the shipment of empty containers opting to position equipment for the lucrative Asia to U.S. trade.

As a result of the contagious ocean carrier saga, recently the subject of a Presidential Executive Order dealing with anti-competitive developments in ocean shipping, the contagion has now fixated on rail ramps where intermodal deliveries of ocean freight moves has come to a virtual standstill. At least that is the case at Lot W.

A…

The below e-mail recently received by the author paints the picture we are seeing a thousand fold in the current ocean shipping marketplace in the inbound/outbound Asia trade lanes which underscores the serious disconnect currently between ocean common carriers and shippers in these U.S trade lanes:

“Carlos:

We are seeing examples where there was…

According to media reports, a massive 400-meter container ship operated by Evergreen Marine Corp. in Taiwan, the Ever Given, became stuck in the Suez Canal after apparently running aground due to high winds from a sandstorm. As a result, potentially hundreds of ships cannot pass on either side of the Suez Canal

The major thrust of this post is to underscore certain micro trends which have emerged in the ocean transport industry in the recent past, which are not expected to transcend into macro territory, but will be present for a good while, and need attention since they can result in substantial damages/losses to importers and exporters. Focusing on these can result in big dollar savings in the short and long run. These micro trends have surfaced as a result of a combination of events and developments such as unpredictable turns in the import trades from China/Asia to the United States; the export levels and trends of agricultural commodities from the U.S. to China; the prevalence of equipment unavailability to the shipping industry (both containers and chassis, and now, sometimes vessels).