FMC Expands Fact Finding Investigation into Detention and Demurrage Practices

The U.S. Federal Maritime Commission (FMC) has issued a supplemental order that will extend and expand its Fact Finding Investigation No. 29 to consider whether alliance carriers whose vessels serve the ports of New York, Long Beach and Los Angeles are employing practices or regulations that violate the Shipping Act. This includes, but is not limited to, carrier practices and regulations related to container demurrage and detention, the return of empty containers, and practices related to the carriage of U.S. exports. FMC Commissioner Rebecca Dye is designated as Fact Finding Officer in this investigation and is authorized to issue a formal Notice of Inquiry (NOI) and/or compulsory information demands to ocean carriers and related parties.

Of particular interest to the Commission in this investigation is carrier compliance with the interpretive rule on demurrage and detention practices which was officially adopted by the FMC and added to its regulations under 46 CFR Part 545.5 in May 2020. This interpretive rule provides explicit guidance as to what the FMC may consider in assessing whether a demurrage or detention practice is unjust or unreasonable. Comments on this rule were submitted by more than one hundred organizations during the rule making process that was organized under FMC Docket No. 19-05. According to this interpretive rule, practices and regulations that provide for the imposition of detention when it does not serve its incentivizing purposes, such as when empty containers cannot be returned, are likely to be found unreasonable.

FMC Increases Reporting Requirements for Alliance Carriers

Pursuant to direction from FMC Chairman Michael Khouri, the FMC has notified three global carrier alliances (2M, THE ALLIANCE, and OCEAN) that certain carrier-specific trade data they have in the past submitted to the Commission quarterly must now be submitted on a monthly basis.

The Commission’s Bureau of Trade Analysis (BTA) relies on a combination of carrier provided data and information from commercially available sources to monitor and analyze container carrier freight rates and market trends. The BTA has determined that given recent fluctuations in the markets, key trade data from these alliance carriers is now required more frequently. A core function of the FMC is the monitoring of ocean carrier alliance agreements. The FMC receives and evaluates exhaustive, commercially sensitive data from ocean carriers who participate in alliance agreements to share vessels, containers, terminals, and information. All ocean carrier service contracts for carrier services to/from USA are filed in FMC’s Servcon database and the BTA staff continuously monitor carrier tariffs. All these data are carefully analyzed along with other information to identify trends in the ocean transportation marketplace and the potential for illegal behavior.

Chairman Khouri stated, “If we detect any indication of carrier behavior that may violate the Shipping Act’s section 6(g) competition standard, we will immediately seek to address these concerns with direct carrier discussions. If necessary, the FMC will go to federal court to seek an injunction to enjoin further operation of the alliance agreement.”

Transpacific Eastbound Carriers Adjust Fuel Surcharges Effective January 1, 2021

Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective January 1 through March 31, 2021. Here is a table of surcharge amounts posted by carriers in their FMC tariffs:

NOTE 1: APL calls the above Bunker surcharge the Bunker Charge - Transpacific and Latin America Eastbound Trade (BAF03/BSC), tariff Rule No. R010, Sub Rule No. B02. The above rates have been in effect since October 1, 2020.

NOTE 2: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF03), tariff Rule No. 010.08. The above rates have been in effect since October 1, 2020.

NOTE 3: COSCO has applied the above Bunker Charge (BUC) since September 1, 2020 per Rule no. 010-003.

NOTE 4: ONE calls the above Bunker surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge above is effective January 1, 2021 until further notice. The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge (T-52) and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge (T-51, T-63) are already applied or included in the base rate. The Bunker Surcharge (T-52) does not apply for the Transpacific trade lane effective January 1, 2020.

NOTE 6: Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 7: Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

Transpacific Eastbound Carriers Update Intermodal Surcharges for Door Rates

In response to ongoing increases to trucking and/or rail costs to move cargo to inland locations in the USA, major ocean carriers of the transpacific eastbound trade, the East Asia/USA trade lanes (U.S. Imports), continue to update various inland surcharges in their FMC tariff. Many carriers call these inland charges their intermodal door delivery surcharge, and some apply additional surcharges called emergency intermodal surcharge, or store door delivery charge, or congestion surcharges. Some carriers have recently announced updates to their inland charges; amounts range from USD 50 to 550 per container. These additional inland surcharges apply on shipments moving under tariff rates and existing service contracts for inland or door service that do not provide for exemption from these tariff rules.

CMA CGM has recently announced expansion of the intermodal surcharge to Los Angeles and Long Beach haulage. CMA CGM plans to implement the “Emergency Intermodal Surcharge - U.S.” at USD 350 per dry container effective November 30, 2020 for cargo moves of carriage haulage door service or merchant haulage to/from Los Angeles, and effective December 2, 2020 for moves to/from Long Beach, for U.S. inland point shipments via Charlotte, Chicago, Cincinnati, Columbus, Detroit, Long Beach, Los Angeles, Memphis, Nashville, St. Paul/Minneapolis, Omaha. This surcharge is an update to the existing emergency intermodal surcharge that had been in effect since June 1, 2019, at USD 350 per dry container, which applied for carriage haulage pre-carriage or on-carriage door service for U.S. inland point shipments over Chicago, Columbus, Houston, Memphis, Savannah. Also, in effect since June 14, 2017 is the Intermodal Door Delivery (IDDS) On-carriage Additional at USD 100 per container, except reefer types.

Hapag Lloyd announced in its newsletter that due to ongoing congestion in the area, Hapag Lloyd will apply a Congestion Surcharge (OCS/PCS) of USD 180 per container for truck movements to/from Los Angeles and Long Beach, effective December 12, 2020. Below is an updated table of carriers that posted rules providing for intermodal, inland, store door, congestion surcharge amounts in their FMC tariff rules.

NOTE 1: APL calls the above charge the Intermodal Door Delivery Surcharge (IDD).

NOTE 2: CMA CGM calls the above charges the Emergency Intermodal Surcharge - U.S. and the Intermodal Door Delivery (IDDS) On-carriage Additional.

NOTE 3: COSCO details terms of inland under tariff COSU-201 Rule 002-030, Inland Charges at Destination U.S.A., and Rule 002-064, Store Door Delivery/Pick-Up Service.

NOTE 4: Evergreen calls this charge the Intermodal Door Delivery Surcharge (IDS/D) for US import cargo, the Intermodal Door Pick-Up Surcharge (IDS/L) for US export cargo. This charge has been in effect since 2014. The Emergency Trucking Cost Recovery (ETCR) expired April 18, 2019.

NOTE 5: Hapag Lloyd calls the above the Congestion Surcharge (OCS/PCS), which will be effective December 12, 2020.

NOTE 6: HMM calls the above charges the Emergency Door Surcharge (EMD/EDS) effective since April 6, 2018, the Delivery of Cargo, and the Store-Door Delivery - Atlantic and Gulf Ports.

NOTE 7: ONE calls the above charges the Intermodal Door Delivery (IDD) (TPEB)(Destination) per rule number 102.030; amounts for other trade lanes are detailed under the Intermodal Door Delivery Surcharge (IDD) per rule number 101.013.

NOTE 8: OOCL calls the above charges the Intermodal Door Delivery Surcharge, and the Store Door Delivery.

NOTE 9: Yang Ming calls the above charges the Intermodal Door Delivery Surcharge, which have been in effect since 2014.

NOTE 10: ZIM calls the above charges the Intermodal Door Delivery Surcharge, effective since April 22, 2014.

Transpacific Eastbound Carriers File GRIs Effective December 15 and January 1, 2021

Several leading carriers serving the Trans Pacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective December 15, 2020, including American President Lines (APL), CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The December 15th GRIs will be the twenty-fourth GRI of 2020 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only.

NOTE 2: Hapag Lloyd GRIs effective December 15, 2020 is a postponement of the GRIs previously effective October 15, 2020, then subsequently November 15, 2020.

Some carriers updated their tariffs to include new General Rate Increases (GRIs) effective January 1, 2021, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The January 1st GRIs will be the twenty-fifth GRI of 2020 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only.

NOTE 2: Hapag Lloyd GRIs effective January 1, 2021 is a postponement of the GRIs previously effective December 1, 2020. These GRIs had previously been postponed from effective October 1, 2020 to effective November 1, 2020, then to December 1, 2020, and now to January 1, 2021.

Transpacific Westbound Carriers Update Fuel Surcharges Effective January 1, 2021

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the January to March 2021 quarter. Here is a table of carriers that have posted fuel surcharge amounts in their FMC tariffs:

NOTE 1: APL calls the above Bunker surcharge the Bunker Surcharge (BAF03), tariff Rule No. R010, Sub Rule No. B00A. The above BAF is effective October 11, 2020 thru December 31, 2020.

NOTE 2: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF-03), tariff Rule No. 010.4. The above BAF has been effective since October 1, 2020.

NOTE 3: HMM has applied the above Bunker Surcharge (BUC) Rule No. 10-02A since October 1, 2020.

NOTE 4: ONE calls the above Bunker surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge above is effective January 1, 2021 until further notice. The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge (T-52) and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge (T-51, T-63) are already applied or included in the base rate. The Bunker Surcharge (T-52) does not apply for the Transpacific trade lane effective January 1, 2020.

NOTE 6: Yang Ming calls the above Bunker surcharge the New Bunker Charge, rule number 10-AH.

NOTE 7: Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 8: Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.