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FMC wants ocean carriers to pay for container storage
Source
American Shipper
Post Date
08/05/2022

The head of the Federal Maritime Commission is warning ocean carriers serving the Port of New York and New Jersey to stop forcing shippers and drayage truckers to store their containers — and pay them for it when they do.

FMC Chairman Dan Maffei is ratcheting pressure on carriers following a meeting with truckers and marine terminal operators at the port on Wednesday.

“The [FMC] has already been investigating reports of carriers ging per diem container ges even when the shipper or trucker cannot possibly return the container due to terminal congestion,” Maffei said in a statement released Thursday. “I will ask that this investigation be broadened and intensified to cover instances where shippers and truckers are being forced to store containers or move them without proper compensation.”

The National Industrial Transportation League and Bi-State Motor Carriers Association last week urged the FMC to susp demurrage and detention at the port as congestion worsens amid spiking import volume. Maffei and the agency’s acting director of the bureau of enforcement, investigations and compliance, Lucille Marvin, followed up with a visit to the port to see conditions firsthand.

“When ocean carriers continue to bring thousands of containers per month to a port and only pick up a fraction of that number, it s an untenable situation for terminals, importers and exporters, trucking companies and the port itself,” Maffei said.

Carriers most behind in picking up their empty containers will be asked for a plan to get caught up.

“Whatever their answers may be, I will do everything in my power to ensure that carriers do not receive involuntarily subsidized storage for empty containers that belong to them,” Maffei asserted. “If it can be shown that a shipper or a trucker is not allowed to return a container then, not only should they not be ged per diem, but the carrier should compensate that trucker for the space it takes up.”

Maffei defed the stricter stance against ocean carriers as being in line with its demurrage and detention rules because it promotes the movement of cargo “since chassis and space would be freed up by carriers taking full responsibility for the empty containers resulting from the increased volumes of import cargo they bring in.”

As record-breaking container ship queues threaten to tie up ports around the country ahead the of the fall peak shipping season, the Port of New and New Jersey announced Tuesday it will be ging ocean carriers a $100 per-container fee on long-dwelling import or export containers, with the goal of freeing up space and improving the balance between imports and exports. The new tariff is effective as of September ping a mandatory 30-day federal notice.
Port of New York and New Jersey sets container fee, mandatory export levels Ahead of the expected busy peak season, the Port of New York and New Jersey will implement a container fee on any long-dwelling import or export containers. The goal of the tariff is to reduce an excess of empty containers dwelling at the port and free up space for container pickup. It includes both loaded and empty containers. The quarterly container imbalance fee, announced Tuesday morning, will be effective as of September, ping a mandatory 30-day federal notice.
“The Port of New York and New Jersey are facing record import volumes, leading to empty containers accumulating in and around the port complex that are now affecting the regional supply chain that is already under stress from various sources across the country,” said Port Director Bethann Rooney. “We emphatically encourage ocean carriers to step up their efforts to evacuate empty containers quicker and at higher volumes to free up much-needed capacity for arriving imports in order to keep commerce moving through the port and the region.”
In addition to the tariff, the port is setting mandatory container export levels. Under the new rules, ocean carriers’ total outgoing container volume must equal or exceed 110% of their incoming container volume during the same period. If they fail to achieve this, the ocean carriers will be ged $100 per container of imbalance. Rail volume is not included.
Container processing has increased by around 12% year to date at the port. The volume of containers has exceeded pre-pandemic levels by 34%. To keep up with the surge in empty containers and long-dwelling import containers, a 12-acre lot is being used. The East Coast’s largest port has been a port of choice for logistics managers who are circumventing the West Coast. Approximately 6.5% of the total April-June volume was rerouted from the West Coast. As a result, delays from China to the port are building, and Rooney wants to get the long-dwelling containers out to avoid additional delays.
American Shipper was told the port is implementing the tariff in September to get ahead of the holiday items expected to come in during peak season. At present, according to the CNBC Supply Chain Heat Map, while there is a buildup of vessels waiting to get into the port, the average time in processing imports is still smooth. Full details on the tariff and what is considered “excess dwell” were posted on the port’s website. Port officials tell American Shipper that the fee will be reassessed once the container crisis eases. A review by the agency’s board of commissioners is needed no later than September 2023.


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