|FMC closed as part of government shutdown
The Federal Maritime Commission is closed as part of the partial federal government shutdown due to a lapse in appropriations.
The commission will resume normal operations when appropriations legislation is enacted and the federal government res, according to an announcement Wednesday.
With the exceptions of Acting Chairman Michael A. Khouri and Commissioner Rebecca Dye, who are presidentially appointed, Senate-confirmed officials, all commission employees have been placed on furlough and are prohibited by law from performing any duties during the shutdown, the FMC said.
As a result, all commission functions have been susped, including the following:
• The commission will not respond to email or phone inquiries.
• The commission’s website will be available during the shutdown, but it will not be d with new information until operations resume.
• The commission will not accept online filings or applications through its website for the following: service contracts through SERVCON; ocean transportation intermediary automated applications or license s; foreign unlicensed non-vessel operating common carrier registrations or renewals; tariff registration forms; eAgreements Filing System (ocean carrier or marine terminal operator agreements or amments); and eMonitoring System (agreement-monitoring reports, minutes and transcripts).
• The commission will not accept filings during this period for: ocean carrier or marine terminal operator agreements or amments; applications for certification of financial responsibility for cruise lines embarking from U.S. ports; and agreement monitoring reports, minutes or transcripts.
• The commission’s online databases — SERVCON, OCC and NVOCC Tariff List, List of FMC Licensed and Bonded OTIs and the Agreement Notices & Library — will not be accessible.
• The commission will not accept or act on complaints, requests for dispute resolution services or ombudsman services.
• All filing deadlines in formal and informal adjudicatory and investigatory proceedings ping before the commission or administrative law judges are temporarily susped. No filings will be received during the shutdown.
Upon reing of the federal government and the FMC, the public is welcome to contact the Office of the Secretary at (202) 523-5725 or firstname.lastname@example.org with any questions about filing deadlines or computation of time in proceedings.
Detention-demurrage fees hit LA-LB port shippers
Shippers frustration with their inability to pick up containers and return empties at the Los Angeles-Long Beach port complex has hit a boiling point in recent days, as thousands of dollars worth of detention and demurrage ges are getting wracked up due to an unusual period of congestion.
The front-loading of US imports from China to beat higher tariffs on $200 billion of goods ahead of a now-delayed Jan. 1 deadline and longshore labor not working the Christmas holidays Dec. 24-25 has put atypical pressure on the largest US import gateway. The head of each port on Dec. 18 pledged relief within six months, as container dwell times hit the highest level in two years and truck turn times are rising.
While importers have already rushed much of their cargo to beat the Jan. 1 deadline, which has now been delayed until March 1, and there are limits to how much Chinese factory production can be scaled up in short-notice, it’s been unclear just how much cargo can still be front-loaded. Three container lines utives warned JOC.com of January tightness on ships and terminals due to a surge of cargo ahead of Asia factories closing for Lunar New Year celebrations, which Feb. 5.
“Congestion in LA and Long Beach is now at peak, which normally occurs in November,” an apparel shipper told JOC.com. “Appointments are full and nearly all containers are at LFD (last day free). Another tr is that more draymen are automatically placing in their tariff a minimum five days chassis rental to cover congestion upon empty returns.”
Late 2018 scamble
Shippers are having trouble evacuating their import cargo, largely due to a lack of available appointments, placing them at risk of paying demurrage fees. Shippers and carriers generally contract with one another for a specific amount of so-called free time. Demurrage penalties are assessed when import boxes are held at container terminals beyond the agreed-upon number of free days, while detention is assessed when the number of agreed-upon days before an empty container is returned to a terminal has expired.
Eric Klein, CEO of the container terminal visibility software provider Crux Systems, tweeted Wednesday that he sees a “disaster” looming in the ports. “There are significant backlogs of cargo not getting out of terminals. Will the free time be exted? The signs of this coming were certainly there. What I see now is the disaster in progress. The average demurrage bill Im seeing is over $3,000 per container. This was all avoidable.”
In situations where congestion builds, the temptation is find a party to blame. The question is whether individual shippers should have foreseen the collective volume surge, induced in large part by the Trump Administration’s threat to increase tariffs on a wide range of Chinese-made goods from 10 percent to 25 percent Jan. That threat has been pushed to early March after trade talks between the administration and its counterparts in Beijing, potentially heralding another surge of volume around the Chinese New Year.
A footwear importer told JOC.com, however, that his goods were not part of the pre-tariff surge, but that he has been impacted by the Southern California congestion nonetheless.
“We were doing our normal shipping,” he said. “It seems the steamship lines/ports were not prepared for the surge. The problems started with voided (sailings), weather conditions in China, sweepers to fill the void, and freight not arriving on time. The bottom line is there are x number of steamship lines carrying a defined number of containers into x number of terminals. I’m not sure where the blame should be. But as Ive asked many times without a response, ‘what did the BCO do wrong that we should be penalized with fees for demurrage and/or detention? And every detention ge comes with additional chassis ges.”
Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, told JOC.com that he has not heard reports from members about undue levels of congestion, nor detention and demurrage accruing.
“So many people pushed volumes up to beat the deadline of Dec. 31,” a freight forwarder told JOC.com. “Some warehouses can’t take it all at this point. Many truckers can’t get the volume off the pier fast enough. I got a call while on vacation from a customer asking for help finding capacity for 100 containers this week alone coming off the pier above what their normal weekly volume is. I think it’s really attribute to the change in shipping plan to beat the Jan 1 implementation date.”
The apparel importer, meanwhile, said the unusual December congestion has even spread to the Port of New York/New Jersey, affecting the company’s inland point intermodal containers. “Some containers are sitting for two weeks before going on rail out of PNCT (Port Newark Container Terminal).”
Executives at the Southern California ports, which are on track this year to handle a combined total of more than 16 million TEU, conceded that terminal congestion and equipment shortages are plaguing the harbor, and proposed about a dozen action items to alleviate the congestion. But many are long-term projects.
Chassis shortages due to the hoarding of equipment by some terminal operators, and BCOs’ increasing use of import containers and the chassis they are resting on as an extension of their warehouses, is one of the biggest contributors to port congestion.