Port Congestion Charges: yes or no?

Some shipping companies in Korea, including shipping agencies, started levying port congestion charges from mid-November as the US West Coast port congestion has lasted over a month in the wake of port lock-outs at 29 ports in early October.

Domestic shipping companies, including Hanjin Shipping and Hyundai Merchant Marine (HMM), as well as several other foreign shipping companies such as Evergreen Marine, P&O Nedlloyd, and Hapag-Lloyd, announced that they would charge port congestion surcharges from late November throughout early December following the rates which other individual companies set.

Announcing that it would impose port congestion charges as much as $750 per TEU and $1,000 per FEU from November 22, Hanjin Shipping came into persuasion with each shipper.

HMM noticed shippers that it will impose on USWC cargoes $500 per TEU and $1,000 per FEU starting from 6 December.

Evergreen Korea, applying port congestion charges from 17 November, said that it already levied $500 per TEU and $1,000 per FEU. P&O Nedlloyd would start to impose $600 per container from December 8.

An insider at Hanjin Shipping said that the company lost $35,000 daily on average by waiting at sea 7 -to 8 days for US West Coast ports.

To implement this loss and thereafter stevedoring delay, shipping companies must inevitably impose surcharges for the remainder of this year, he explained.

In the meantime, HMM said that it is closely watching the situation as the PMA and ILWU agreed tentatively on some parts a few weeks ago. However, they just announced the surcharges because they don't know what will happen when the 80-day cooling-off period is over. If both sides, the PMA and ILWU, solve the problems smoothly, the surcharges may not levied, said one HMM official.

In the mean time, Maersk-Sealand, MOL, NYK and APL do not plan to impose port congestion surcharges.