Carriers Reinstate West Coast Port Congestion Surcharge Amidst Delayed ILWU/PMA Labor Talks

Despite multiple attempts from the Pacific Maritime Association (PMA) to convince the International Longshore Warehouse Union (ILWU) to resume “big table” negotiations, the ILWU has postponed talks until no sooner than December 2, 2014.  During this time, the union will be participating in subcommittee negotiations dealing mostly with local issues.  Neither the PMA nor the ILWU have requested the assistance of a mediator from the Federal Mediation and Conciliation Service (FMCS), an independent agency whose duties include providing neutral third party mediation services to help unions and employers resolve contract disputes, even after the urging of port officials.  After six months of working without a contract, strategic work slowdowns have begun crippling US West Coast trade and driving up carrier costs.

Guide to the ILWU Labor Negotiations [Infographic]

After some initial mixed messages, carriers in the Trans-Pacific market have made the decision to reinstate the port congestion surcharge (PCS).  PCS will apply to all cargo that is in-gated at origin on or after November 26, 2014.

Port congestion fees are as follows:

  • $800/20’
  • $1000/40’
  • $1125/40’ HC
  • Up to $25 w/m for LCL cargo

In anticipation of other Trans-Pacific carriers formally announcing their port congestion surcharges, the Federal Maritime Commission (FMC) is currently reviewing a number of concerns into PCS validity:

  1. Carriers are still not compliant with the 30-day advance notice requirement for tariff increases.
  2. Vagueness of the application of surcharges.
  3. The significant value of the surcharge, which does not appear to correspond to carrier cost increases.

We will continue to monitor the situation and provide updates as additional information becomes available.    Please contact your Shapiro representative with any questions.