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November 18, 2014  




At the urging of the NCBFAA, the FMC issued the attached release on November 17, which can also be found on the agency's website. In the view of the Association, this means that the carriers cannot properly assess any congestion or other surcharges on cargo that was in their possession or control at the time the implementation of the surcharges was in place.


The Association is aware that some carriers believe that they still can assess these surcharges because many of them previously published congestion surcharge rules and are taking the position that the surcharges are accordingly appropriate because everyone had notice that such costs might be imposed. While the NCBFAA disagrees with that position, all companies should be aware of this ruling by the FMC and consult with their own counsel if necessary to determine what position to take at this time.


Nonetheless, the Association will continue to seek clear guidance from the FMC on this important issue.


Port Congestion Surcharges

November 17, 2014

The Federal Maritime Commission is receiving numerous inquiries regarding the congestion surcharges for "labor unrest" being implemented by ocean carriers as announced in tariff rules required to be published under the Shipping Act of 1984 and the Commissionís regulations at 46 CFR Part 520.


Unless done pursuant to a waiver or exemption, any tariff rule (including surcharges) of a common carrier that results in an increased cost to a shipper may not be effective earlier than 30 days after publication. 46 U.S.C. ß 40501(e) and 46 CFR ß 520.8. Many carriers previously published in their tariffs advance or conditional notice of an intention to implement surcharges in the event certain conditions are experienced. All such carrier tariff rules, however, must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to "labor unrest."


The Shipping Act and the Commissionís regulations require that the rules applicable to any given shipment shall be those in effect on the date the cargo is received by the common carrier or its agent. 46 CFR ß 520.7. Thus, if any labor disruption were to occur at a port after cargo has been tendered by a shipper, a carrier may only lawfully charge the rates in effect on the day the cargo is tendered.


The Commission continues to review congestion surcharge rules published in carrier tariffs and is gathering information from carriers regarding implementation of these surcharges.

If you have questions or concerns about a tariff publication, please contact the Bureau of Trade Analysis attradeanalysis@fmc.gov. For questions about the Shipping Act or the Federal Maritime Commissionís regulations, please contact the Office of the General Counsel at generalcounsel@fmc.gov.


Our regulatory experts are monitoring the situation and keeping a close eye on labor negotiations, which began on May 12, 2014. In the meantime we are checking shipment status on a daily/hourly basis to see where our clientís cargo stands in movement towards its final destination. While we canít control the situation we can keep you informed.


The information contained in this newsletter has been compiled from various industry newsletters and other public sources. While we use reasonable efforts to furnish accurate and up-to-date information Page & Jones, Inc. is not liable or responsible for the accuracy or reliability of any information contained herein.


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