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.


Continue Reading The Dynamic of the Chassis Quandary Today in Ocean Shipping in the United States

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
Continue Reading Suez Canal Blockage Could Worsen Port Congestion and Impact Usage of Panama Canal

What might not be so obvious in this COVID-19 environment, which we have grown to associate with shortages, is that counterintuitively there are issues beginning to appear dealing with the opposite situation. The Journal of Commerce has reported that “[t]he container shipping industry is marshaling a response to signs of a building import backlog as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to coronavirus disease 2019 (COVID-19).” This is a development with implications to all stakeholders in the supply chain and will have some impact on retailers/manufacturers, ocean carriers, ocean transportation intermediaries, and warehouses.


Continue Reading COVID-19 Impacts on Demurrage and Detention

shipping containersMost agencies of the United States government, including the Federal Maritime Commission (”the Commission”), have been closed since December 22, 2018. Since that date shippers, ocean common carriers, and non-vessel operating common carriers in their shipper role have not had access to SERVCON, the service contract electronic filing system of the Commission. So how is it intended for these supply chain players to adhere to Commission regulations related to initial or service contracts about to be renewed, or amendments to existing service contracts during this dysfunctional period which at this point hasn’t shown even a hint of an end game? Short answer: the same as always, but without the filing obligation nor risk of sanctions (penalties). The filing requirement is temporarily lifted. Therefore, service contract activity can continue as usual without concern of penalties. There are some caveats though.
Continue Reading U.S. Government Shutdown: The Impact on Federal Maritime Commission Service Contracts

On September 22, 2018, Bill (SB-1402) was signed into law in California to become effective January 1, 2019. That law makes “Customers” (generally shippers, exporters, importers, and ocean intermediaries, FMCSA Property Brokers)  that engage or use “a port drayage motor carrier” jointly and severally liable with that port drayage motor carrier if that carrier is listed on the Internet Web site maintained by the California Division of Labor Standards Enforcement. This ominous list now identifies port drayage motor carriers which have been found liable to a “port drayage driver” for unsatisfied court judgments, assessments, orders, decisions, or awards, for port drayage services performed for which the drivers have not been paid or expenses for which they have not been reimbursed, plus damages, penalties, and interest. The California Labor Commissioner’s Office, Division of Labor Standards Enforcement, has awarded in excess of $45 million in unlawful deductions from wages and out-of-pocket expenses to more than 400 drivers, and the California Labor Commissioner’s Office noted that drivers have seen little of those awards.
Continue Reading California Labor Commissioner Lists Port Trucking Companies Which Can Result in Serious Penalties to Shippers and Others

shipping containers

On September 22, 2018, Bill (SB-1402) was signed into law in California to become effective January 1, 2019. That law will make a “Customer” that engages or uses “a port drayage motor carrier” jointly and severally liable with that port drayage motor carrier if that carrier is listed on the Internet Web site maintained by the Division of Labor Standards Enforcement. This ominous list will identify port drayage motor carriers which have been found liable to a “port drayage driver” for unsatisfied court judgments, assessments, orders, decisions, or awards, for port drayage services performed for which the drivers have not been paid or expenses for which they have not been reimbursed, plus damages, penalties, and interest.

The reason why this Bill is not as tentative as it sounds is that The California Labor Commissioner’s Office, Division of Labor Standards Enforcement, has awarded in excess of $45 million in unlawful deductions from wages and out-of-pocket expenses to more than 400 drivers, and that drivers have seen little of those awards.
Continue Reading Shippers, NVOCCs, Ocean Carriers, And Other Port Players to Be Liable to Port Drayage Drivers Under New California Legislation Effective January 1, 2019

The following is a short, to the point, summary of recent developments which impact transportation intermediaries, some of which can be implemented simply without fanfare, others which just bear careful monitoring.  The Federal Maritime Commission (“FMC”) recently passed new regulations relating to Negotiated Rate Arrangements (“NRAs”), and NVOCC Service Arrangements (“NSAs”) which require some simple implementation, but then little else. The Federal Motor Carrier Safety Administration (“FMCSA”) has amended Hours of Service regulations which provide for strict usage of Electronic Logging Devices (“ELDs”), and a corresponding obligation for those intermediaries who select motor carriers for transport. Last but not least, we will briefly explore the question of where is the transport intermediary industry headed in the evolving e-commerce revolution?

Continue Reading Update on Current Issues Impacting Transportation Intermediaries

WHEN? The Federal Maritime Commission by Final Rule issued July 19, 2018 took final rules to simplify freight pricing requirements for Non-vessel Operating Common Carriers (“NVOCCs”) by establishing changes to Negotiated Rate Arrangements (NRAs) and NVOCC Service Arrangements (NSAs). These new Rules become effective August 22, 2018.
Continue Reading New FMC Regulations Effective August 22, 2018