Chinese Line Files First Carrier Complaint with FMC Over Congestion Fees
Most of the complaints over congestion surcharges have been leveled by shippers and trucking companies against carriers and terminals, but in a reversal of fortune, the Federal Maritime Commission yesterday received its first complaint from a carrier against a terminal. Chinese carrier BAL Container Line, which had been briefly tempted into the transpacific trade during the height of the surge, is now seeking relief from the FMC for more than $8.8 million in charges filed by Long Beach terminal operator SSA.
A Chinese shipping firm, BAL has grown rapidly as a logistics and intra-Asia carrier. At the peak of the surge in transpacific volumes in 2021, the carrier announced it was expanding its operations by chartering a series of vessels. They started service in June 2021 using a chartered 2,190 TEU vessel to California, while also reporting they would launch services to Europe and Mexico to help customers who could not find capacity on these routes.
To facilitate its operations, BAL entered into four agreements with SSA for terminal services in the Port of Long Beach at Terminal A. The company provided service and used the terminal capacity at SSA’s facility between August and December 2021. As container volumes began to soften and prices declined, BAL reported it did not operate services to Europe in 2022, moved from vessel charters to slot charters for California, and by the beginning of 2023 had stopped the long-haul services.
In the complaint to the FMC, they reported receiving a nearly $4.3 million congestion surcharge fee invoice from SSA in November 2021 and a second for more than $4.5 million in January 2022. The company details delivering over 4,600 containers to Long Beach and incurred congestion charges when the boxes went past the agreed period of free time.
BAL contends the charges are “unjust and unreasonable.” They assert in addition to not providing sufficient information, that shippers or their agents could not remove the containers because SSA had placed them in an “inaccessible area of the terminal.”
The complaint says that BAL asked for explanations from SSA regarding the fees and received a single-line response citing a clause in the service contract. In the contract, BAL had agreed to pay 100 percent demurrage and $100 per unit per day as a terminal congestion fee beyond the free time.
In the complaint filed with the FMC on October 19, they allege that SSA “never explained the congestion charge nor how it alleviates congestion.” They contend that for the fee to be imposed, the Shipping Act requires SSA to be clear and definite. Among the information they believe was required were details on what triggered the fees as well as how they would be terminated.
BAL is asking the FMC for relief from the more than $8.8 million in congestion fees they incurred for containers that were “unremovable from the port.”
To date, most of the congestion fee and D&D complaints filed with the FMC have come from the inability to return containers because of the lack of reservation slots and yard capacity. Shippers have also filed complaints for fees incurred as door-to-door services failed due to the lack of chassis to move the boxes out of the yard. The complaint from BAL reverses the parties, instead of carriers imposing the fees, this one seeks relief for a carrier that experienced the fees.