The FMC Rebuts Port Congestion Surcharges Imposed by Carriers

As we previously published on November 14, 2014, multiple carriers had announced the implementation of port congestion fees as protection against increased operating costs associated with extreme congestion at terminals.  On November 17, 2014, the Federal Maritime Commission (FMC) issued a statement noting that carriers cannot properly assess any congestion or other surcharges on cargo that was in their possession or control at the time of implementation of the surcharges.  The FMC issued the notice at the urging of the National Customs Brokers & Freight Forwarders Association of America (NCBFAA).  The NCBFAA became aware that some steamship lines felt entitled to assessing these surcharges because they had previously published surcharge rules but the NCBFAA disagreed with that position, and thus contacted the FMC for further guidance.

The FMC announcement stated the following:  “The Shipping Act and the Commission’s 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 § 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.”  This means that such surcharges cannot be in effect for cargo that had already departed the foreign port and was in route to the US.   In addition, the FMC stated that all such carrier tariff rules must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to “labor unrest.”

Since the FMC announcement, many carriers have retracted the surcharge and more are expected to do so today.  The FMC continues to review congestion surcharge rules published in carrier tariffs and is gathering information from carriers regarding implementation of these surcharges.

Shapiro is monitoring the situation and and will keep you informed of further changes.

Click here to view the FMC’s full statement on Port Congestion Surcharges.