SURCHARGES & PORT STRIKE

In recent months, many vessel operating common carriers and NVOCCs have updated their FMC tariff rules to provide surcharges of USD 1000 per FEU to be imposed in the event of port congestion due to labor disruption, lockouts, or strikes. The contract between the International Longshore and Warehouse Union (ILWU) and vessel operators represented by the Pacific Maritime Association expires June 30, 2014 and negotiations for a new contract are underway. The Federal Maritime Commission (FMC) has issued an industry advisory reminding all parties that any tariff rule (including surcharges) that results in an increased cost to a shipper may not be effective earlier than 30 days after publication. Furthermore, tariff rules applicable to any given shipment are those in effect on the date the cargo is received by the carrier the origin port or inland point. These regulations apply to both U.S. imports and exports.