Maersk Line postponed the effective date of its proposed congestion surcharge at West Coast ports until Feb. 14. The surcharge, which is tied to contract talks between the International Longshoremen’s Association and waterfront employers on the East and Gulf coasts, had originally been scheduled to take effect on Dec. 29.
Given the uncertainties surrounding the contract negotiations between the ILA and the United States Maritime Alliance, shipping lines are concerned that a coast-wide strike from Maine to Texas could result in a massive diversion of container traffic to West Coast ports.
A significant cargo diversion could overwhelm the port and inland infrastructure capabilities of the ports, resulting in delays and congestion.
Maersk, in a newsletter to its customers, listed a series of surcharges that would be imposed in the event of a strike. For example, the proposed surcharges include $320 per 20-foot imported container, $400 per 40-foot imported container and $1,000 per 40-foot exported container. Specific amounts are listed for other container sizes.
ILA contract negotiations have been on a roller coaster rise this past year. ILA President Harold Daggett last March told the Journal of Commerce’s Trans-Pacific Maritime Conference that a strike was possible when the existing contract expired on Sept. 30, 2012, unless employers agreed to several key union demands.
Both parties reached agreement on the demands that Daggett listed, and it appeared last spring that a new contract was within reach. However, USMX President James Capo then made certain demands of the union regarding work practices and payment practices that have been present on the waterfront for decades.
That prompted a breakdown in negotiations, and once again the possibility of a strike emerged as the Sept. 30 deadline approached. However, with the help of a federal mediator, both parties agreed to extend the contract until Dec. 29.
Some carriers, including Maersk, had set Dec. 29 as the effective date for congestion surcharges, but the ILA and USMX then agreed to extend the contract until Feb. 6.
In addition to the coast-wide contract, negotiations are also being held at individual port ranges on local issues. On Wednesday, the important negotiations in New York-New Jersey, the East Coast’s largest port, took a turn for the worse, and the ILA walked out of the negotiations.
Maersk stated in its congestion surcharge update that if surcharges are levied, they will apply to all shipments to and from ports in the U.S., including import shipments to the U.S. that are routed through Canada. If there is no labor action, the surcharges will not be implemented.
“Please note this is a forward filing as a precaution to address the potential for congestion as a result of possible labor actions. Should there be no labor action and subsequent congestion disrupting operations, this tariff filing will be nullified,” Maersk stated.