Month: December 2012

East and Gulf Coast Port Strike Postponed (and hopefully averted!)

Good news that is potentially great news! The ILA and USMX have come to a tentative agreement on container royalty payments (the main sticking point preventing a new contract from being agreed upon). With this agreement, both sides have agreed to an extension of 30 days (until January 28, 2013) to complete negotiations on the remaining issues in the contract.

Neither side has published details about the agreement on the royalty payments. I am also not sure if there will be any further sticking issues that will prevent the contract from completed within the next 30 days. However I am hopeful that a final contract can now be agreed upon.

Hoping our Federal Government can also come up with an 11th hour agreement on the Fiscal Cliff crisis!

Wishing everyone a joyful and peaceful New Year!

Jimmy Ting

jimmyting@great-world.com

http://www.ilaunion.org/news.html

http://www.usmxlaborupdates.com/

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Port Congestion Surcharge Update

As I’ve mentioned over the past few months, the carriers will charge a Port Congestion Surcharge (PCS) in case there is a strike at the East and Gulf Coast ports. Here is the latest update on the PCS amounts from the various carriers. Please pay particular attention to the remarks on how the PCS will be charged.

PCS (Port Congestion Surcharge)

CARRIER

TRADE

20’GP

40’GP

40’HQ

45’HQ

EFFECTIVE DATE

REMARKS

ANL

USA

$800

$1,000

$1,100

$1,266

5-Oct-12

Basis on gate-in date

APL

USA

$800

$1,000

$1,125

$1,266

30-Dec-12

Basis on gate-in date

CMA

USA

$800

$1,000

$1,100

$1,266

30-Dec-12

Basis on arrival date

COSCO

USA

$800

$1,000

$1,125

$1,266

29-Dec-12

Basis on gate-in date

CSAV

USA

$800

$1,000

$1,125

n/a

6-Oct-12

Basis on gate-in date

CSCL

USA

$800

$1,000

$1,125

$1,266

29-Dec-12

Basis on gate-in date

EMC

USA

$800

$1,000

$1,125

$1,266

5-Dec-12

Basis on gate-in date

HAMBURG

USA

$800

$1,000

$1,000

n/a

10-Jan-13

Basis on on-board date

HAPAG

USA

$800

$1,000

$1,125

$1,266

1-Dec-12

Basis on arrival date

HANJIN

USA

$800

$1,000

$1,125

$1,266

1-Dec-12

Basis on gate-in date

HMM

USA

$800

$1,000

$1,125

$1,266

2-Oct-12

Basis on origin cargo receipt date

KLINE

USA

$800

$1,000

$1,125

$1,266

30-Dec-12

Basis on gate-in date

MAERSK

USA

$800

$1,000

$1,125

$1,266

29-Dec-12

Basis on gate-in date

MASTON

USA

$500

$500

$500

$500

10-Jan-13

Basis on gate-in date

MSC

USA

$800

$1,000

$1,125

n/a

1-Oct-12

Basis on gate-in date

NYK

USA

$1,000

$1,000

$1,000

$1,000

29-Dec-12

Basis on gate-in date

OOCL

USA

$800

$1,000

$1,125

$1,266

29-Dec-12

Basis on gate-in date

UASC

USA

$800

$1,000

$1,125

n/a

29-Dec-12

Basis on arrival date

 

We will continue to monitor the situation closely.

Jimmy Ting

jimmyting@great-world.com

East Coast and Gulf Port Labor Dispute!!!

The latest news on the labor negotiations between the United States Maritime Alliance (USMX representing the East Coast & Gulf Port terminals and carriers) and the International Longshoremen’s Association (ILA) isn’t good. The contract deadline was pushed back three months ago. However the deadline of December 29, 2012 is less than ten days away and the contract negotiations seem to be at an impasse.

The Federal Mediation and Conciliation Service (FMCS) has been trying to mediate an agreement between the two parties for months. More recently, the FMCS has been trying to get both sides to agree on another short contract extension past the December 29th date. As of today, without any agreement in site, neither side has agreed to an extension. What is interesting is that both sides are blaming the other for not getting an extension past.

If you’re interested in getting into the nitty-gritty details, you can visit the websites of the respective sides:

Both sides are claiming that the other side rejected the extension.

I’m not here to take sides on the issue. My goal is to offer advice to the shipping (importing and exporting) community on how to deal with this labor dispute. From the looks of it, there is a decent chance that we may be heading for a strike on December 29th. The ILA has already authorized a strike if no agreement is reached.

Importers with goods coming to the East Coast and Gulf ports have the most to be worried about. Carriers are making planes to reroute containers if a strike does occur. As discovered during Hurricane Sandy and few weeks ago during the 8-day strike in Los Angeles/Long Beach, the carriers have the right to declare Force Majeure in such cases. If Force Majeure is declared, carriers will have no responsibility to move the goods any further than the diversion port. In some cases, importers will have to make arrangements to move the goods from the diversion port to the final destination. In other cases, importers may have to pay additional fees to the carrier in order for the carrier to move the goods to the original final destination. If the goods have not shipped out yet, now would be time to decide on moving the goods through a West Coast port or via Canada.

Importers with goods coming to the U.S. West Coast as well as onward to inland destinations via rail will also be impacted. We are not sure if space will get tight, but there is a distinct possibility as we expect a surge in shipments in the weeks leading up to the Chinese New Year (February 10, 2013). If space does get tight, we can also expect the carriers to be bolder with their attempts to increase ocean freight shipping rates.

The carriers have almost all announced a Port Congestion Surcharge ($1000 per 40′) to be implemented on all shipments coming the United States if a labor dispute does occur. This is a bottom line impact on all importers large and small.

Let’s all cross our fingers and hope that we’ll get a resolution in the coming days before December 29th.

-Jimmy Ting

jimmyting@great-world.com

LA/Long Beach Port Strike Over

The strike at the ports of Los Angeles and Long Beach are officially over. Both sides came to an agreement late last night. Details of the agreement are not immediately known. One publication I have read indicates that the new contract will extend six years. The longshoremen are back at work this morning.

Here is a review of what importers can look forward to in the aftermath of the week long strike.

  1. Vessels that have arrived and stayed in Los Angeles and Long Beach will begin to be worked on this morning. I assume it will be on a first-in, first-out basis. I think it would be reasonable to expect that there will be some congestion at the terminals that may take a few weeks to get over.
  2. Truckers in Los Angeles and Long Beach will be busy working through the back log of containers that have arrived. Importers should work closely with truckers to prioritize deliveries.
  3. Importers with new bookings from overseas must double-check the vessel schedules as there is a strong possibility that carriers may no longer be on track with their prior posted schedules. The vessels that have stayed for a week at the Los Angeles / Long Beach ports may be at least a week behind their sailing schedule. As we saw from the 2002 port strike, carriers needed a few weeks to re-align their vessel schedules.
  4. For shipments diverted to other ports such as Oakland, Seattle, and Tacoma, Customs has provided the following instructions:

Vessel Diverted to Foreign Port and Discharged: When a vessel does not arrive in Long Beach and diverts to a foreign port of entry to discharge freight, all bills of lading and entries filed against those bills need to be deleted. New entries will be filed at the appropriate port of entry for merchandise entering the U.S. A new prior notice will be transmitted to the Food and Drug Administration (FDA) for shipments requiring prior notice. The Trade can submit a deletion list to the Long Beach Trade Interface Unit (TIU) and does not need to provide any additional documentation. Entries should be removed from the statement.

Vessels Diverted to Foreign Port Not Discharged: When the vessel is diverted to a foreign port of entry but not discharged, no change is needed to the bill of lading or entries. The arrival date for the vessel will reflect the date the ship returns to Long Beach to be offloaded

Everyone is breathing a sigh of relief now that the LA/Long Beach labor dispute is over. However we are not out of the woods yet. Everyone now must shift their eyes to the East Coast port contract negotiations. The deadline of December 29th is less than a month away. As reminded previously, all importers, even those with shipments only coming to the West Coast, should be concerned with these negotiations. The carriers have announced a Port Congestion Surcharge that would be implemented in case of a East Coast port strike.

-Jimmy Ting

jimmyting@great-world.com

LA/Long Beach Port Labor Dispute Enters Second Week Without Resolution

Seven days after members of the OCU clerical works began striking, the same terminals in Los Angeles and Long Beach remain closed. Carriers are starting to divert vessels to other ports along the West Coast. Please check with your freight forwarder to see if vessels currently on the water are still bound for Los Angeles/Long Beach or whether they are being diverted.

As mentioned in my previous post, if you have containers heading to a Midwest location, you should consider booking with a carrier that discharges in Canada (Vancouver or Prince Rupert).

-Jimmy Ting

jimmyting@great-world.com