By Arthur Chen      photo: @tirachardz

Smart liners respond no action, it's really a brilliant trick.

My post on Monday discussed the Ports of Los Angeles and Long Beach announced the terminals began to charge port detention surcharges for containers that have stayed too long by the shipping lines in November. Coincidentally, the National Shippers Advisory Committee Council,( NSAC), held its first meeting. This is composed of 12 American importers and 12 exporters, and the purpose is to provide advice to the Federal Maritime Commission (FMC). Members include global giant companies such as Amazon, Wal-Mart, Target, Office Depot and IKEA. The committee members have discussion on the topic of the detention surcharge for containers transported by truck with a detention time of 9 days or more, and for containers transported by rail for a detention time of 3 days or more, an additional $100 per day. . Although this fee is charged to the carrier (shipping lines ), the liners will definitely pass the fee on to the cargo owners (consignee/shipper), which means that this will add to the rising demurrage of all cargo owners.

 NSAC members emphasized at the meeting that the cost of Los Angeles/Long Beach Port will ultimately be borne by the shipper. The information obtained by the two large cargo owners and the shipping lines have clearly answered. Daniel Miller, head of Cargill global container business, called this charge a "crazy charge" and said: "We know that all of this will fall on our heads. I had a few phone calls with the carriers yesterday, The shipping lines have admitted that - YES, these surcharges will come back to us." Rick DiMaio, senior vice president of supply chain operations at Office Depot, also said: "All fines and fees flow to us and to the shipper. "It is conceivable that for this sudden surcharge, all shippers are seriously worried on these uncontrollable additional transportation costs will be added to the logistics cost of the original load, which is equivalent to sprinkling salt on the wound.

Some logistics companies have already inquired about FMC which were -- Before implementing the new charges, does the port have to notify the carrier 30 days in advance? Does the carrier have to notify the shipper 30 days in advance? There is a saying that the port can impose charges without prior notice, but the carrier must notify the shipper 30 days in advance. However, if the carrier has stated in the quotation that they are allowed to pass on port charges immediately, the situation is different. HMM’s current quote agreement includes a clause stating that “the shipper shall be responsible for paying any fees or surcharges imposed on the carrier by the maritime terminal, port authority, government agency, or other third-party vendors.”  Even if the terms are clear, at present almost all shipping companies are standing still, and they don’t understand how they will deal with this surcharge. Everything is ambiguous, and they do not seem to show any opposition or nervousness. On the contrary, the cargo owners noticed the threat and panic to warn to public. NSAC members believe that with the current supply chain infrastructure, these port surcharges will not speed up the circulation of containers at all. Amazon also expressed that it is difficult to accept this demurrage, these charges will not promote any positive function, it will not bring any benefits to the current state.

The shipping lines remain silent attitude may be thinking of the cargo owners be panic to pull the trigger to "represent" the crazy charge to the FMC, the congress, and even the Biden government to respond. The are crying out these ridiculous surcharges are unreasonable and useless which shall cause the consequence of chain reaction so as to that inflation cannot be suppressed. Smart shipping lines respond no action after this surcharge explored, which is really a brilliant trick.

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