Print PDF

FMC Updates Trade Community on Cargo Carried by Bankrupt Shipping Line

Thursday, October 06, 2016
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission recently provided the following information concerning cargo being transported by Hanjin Shipping, a major ocean carrier that has declared bankruptcy.

Cargo Status. Hanjin has advised that all shipments currently located in the U.S. are now being discharged only to the container yard or port. U.S. intermodal shipments have been re-rated to the CY/port only and shippers will only pay that rate. Hanjin will only deliver cargo as far as the port or terminal. Further inland transportation must be arranged and paid by the shipper, and marine terminal operator charges may apply depending on circumstances.

MTO Charges. There may be outstanding MTO charges for cargo discharged at U.S. ports prior to Hanjin’s bankruptcy, and shippers have asked the FMC what is a reasonable fee for MTOs to be charging customers. The FMC states that MTOs typically charge for the throughput of cargo based on two factors: gate and yard cost (based on standard working hours, equipment, and labor required) and stevedoring cost (associated with loading/discharging containers to/from a vessel, which may include a base container rate if the vessel is worked during a normal daytime shift plus any charges for overtime differential, meal hours, holidays, weather, etc.).

For cargo discharged at U.S. ports after the bankruptcy, Hanjin has advised the FMC that it has paid MTOs the container handling charges on all current shipments and that no MTO should be currently charging delivery fees on Hanjin shipments with the exception of demurrage, where applicable.

The FMC notes that it has limited public information about marine terminal charges. MTOs are not required to make their schedules of rates, regulations, and practices available to the public, and only 154 of 257 MTOs registered with the FMC have done so. In addition, MTO throughput rates are generally negotiated contractually with the carrier, so MTO schedules do not contain a rate applicable to the current circumstances.

Any shipper using an intermediary, such as a non-vessel-operating common carrier, should request supporting documentation to verify that it paid the MTO to obtain the release of the container.

Empty Containers. Hanjin is currently working to establish multiple off-terminal locations throughout the U.S. where truckers will be able to return empty containers. An American Shipper article notes that at the ports of Los Angeles and Long Beach alone there are “thousands of chassis” mounted with containers either owned or leased by Hanjin and that until there is a place to return those containers “the chassis are not available for use” to haul other containers, which poses a particular challenge during the current peak shipping season. Hanjin has assured the FMC that it will not assess container detention fees.

Cooperation Sought. FMC Chairman Mario Cordero has urged parties across the intermodal supply chain to find ways to cooperate and collaborate to solve operational and equipment issues created as a result of Hanjin’s bankruptcy to “assure our maritime gateways remain capable of handling international commerce without interruption.”

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines