Logistics Hot Spots and Carrier Penalty Update

Posted 05/04/2022

With the arrival of May and early spring, congestion remains a significant disruption around the world. WSSA’s commentary is featured in SevenFifty along with other industry experts discussing the supply chain crisis. Please find the article attached here

Please find the below updates for impacted locations around the world:

NY/NJ: The Port of NY/NJ continues to be a trouble spot for congestion and delays. In fact, the severity of the congestion has increased to a level beyond anything we have seen in the past. In addition to the extreme congestion, ocean carriers are not providing empty termination locations for their containers, causing truckers to wait in line at the marine terminals for up to 6 hours to secure a single container. As expected, due to the extreme circumstances, truckers have begun to apply additional congestion fees due to this ongoing issue and you will see what is described as a “chassis-split” fee as empty containers must be delivered to a different location than where the trucker is going to pick up a full container.

France: Congestion at Le Havre has reached extreme levels, especially within MSC’s terminal (TN MSC). Our office in France reports general chaos with the extreme saturation of MSC bookings. Truckers are unable to take appointments to deliver containers before cut off which is causing blockage to trailers, chassis and ultimately, containers being rolled over to next vessels, which incur additional costs to the cargo owners. Additionally, because of this conflict, some truckers are refusing to call the TNC terminal and are billing back extra charges for waiting in line if they do so. In an effort to combat this congestion, MSC is urging customers to utilize rail service or even barge as alternative transportation methods. All in all, the situation does not seem to be improving, so if you have cargo moving out of Le Havre via MSC, please plan on cost increases and extensive delays.

Spain: Ports in Spain are recovering gradually from the country’s recent trucker strike, but there are still some trouble spots. Bilbao is still heavily congested as this was the last port where the strike was called off. Valencia is still a bit congested, but hopefully the backlog will be cleared within the next week. In good news, Algeciras and Barcelona have cleared congestion and are back to normal.

Chile: Inclement weather has already begun impacting transportation in Chile, especially through the mountain pass connecting Chile and Argentina. This pass is treacherous, and when bad weather hits, truckers are unable to make the journey until the roads are once again cleared. Stay tuned for updates on pass closures as the Chilean winter season progresses, and plan for some delays if you have cargo traveling within this region.

Carrier Penalty – Hapag Lloyd: The discussion of the ethics of carrier charges has been a hot topic, and now in recent news, carrier Hapag Lloyd is facing $822,200 in fines for levying unlawful demurrage and detention charges. The FMC conducted an investigation into these allegations and found that HL  incorrectly applied detention and demurrage charges to 11 containers handled by a California drayage firm. The FMC’s Bureau of Enforcement found that the penalties were punitive in nature as the carrier had “knowingly and willfully” applied the charges despite the drayage firm being unable to return the containers. In this instance, the firm had made every attempt to return the containers, but was unable to do so because there were insufficient appointment slots to make the deliveries. That being the case,  the demurrage and detention charges should not have been levied based on the interpretive rule published by the FMC governing reasonable practices for demurrage and detention.  The issue lies in the fact that the carrier offered no help to successfully return the containers, and charged the drayage firm regardless. The fines in this case represent a big step in the question of the ethics of carrier charges, but the question still remains whether carriers are placed under enough pressure to change their practices. For the full story, please refer to the Loadstar article attached.