FMC Chairman calls on carriers to pay for container storage

FMC Chairman calls for carriers to pay for container storage

US Federal Maritime Commission (FMC) Chairman Daniel Maffei has visited the Port of New York and New Jersey (PANYNJ) to address increasing congestion.

The seaport has witnessed a cargo increase of nearly 12 per cent year-to-date compared to the same period last year and an astounding rise of 34 per cent in cargo volume compared to the same period during pre-pandemic 2019 – which led to increasing congestion issues.

Just last week, PANYNJ announced it will implement a new quarterly container imbalance fee for ocean carriers as part of the seaport’s effort to reduce congestion.

The container management fee, targeting excess empty containers being stored in the port for long periods, will be effective as of 1 September 2022 pending a mandatory federal 30-day notice period.

The fee will reduce the number of excess empty containers dwelling at the port and free up much-needed capacity for containers that are full of imports and ready to be picked up by cargo owners.

During his meeting with trucking representatives and marine terminal operators at PANYNJ, FMC Chairman Maffei defended this stricter standpoint against ocean carriers.

READ: New York, Savannah bearing brunt of US East Coast congestion

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

“The commission has already been investigating reports of carriers charging per diem container charges even when the shipper or trucker cannot possibly return the container due to terminal congestion.

“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 FMC has already been granted extra powers to help restrain inflation and ease congestion across the supply chain with the Ocean Shipping Reform Act (OSRA).

The OSRA was first discussed to intervene on the disrupted global supply chain. Together with an increase in consumer demand, the COVID-19 pandemic massively contributed to boosting carriers’ operating profits.

READ: Supply chain rattles amid improved seaside congestion

“The commission will ask the carriers that have fallen the most behind in picking up their empties what their plan is to rectify the situation,” added Maffei.

“Whatever their answers may be, I will do everything in my power to ensure that carriers do not receive involuntarily subsidised storage for empty containers that belong to them.

“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 charged per diem, but the carrier should compensate that trucker for the space it takes up.

“This is completely in line with the incentive principle set forth by the commission in its rules, in that it would promote 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.”

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