Volume 25, Number 3
March 2, 2021
Oakland, California
SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.
Signals™ Headlines - March 2, 2021

FMC Demands Ocean Carriers Provide Details on Detention and Demurrage Practices

The Federal Maritime Commission has announced it will issue information demand orders to ocean carriers and marine terminal operators (MTOs) to determine if legal obligations related to detention and demurrage practices are being met.

The orders will be issued under the authority granted to Commissioner Rebecca Dye as the Fact Finding Officer for the Commission’s Fact Finding 29, “International Ocean Transportation Supply Chain Engagement.” Targets of the orders will be ocean carriers operating in an alliance agreement and calling the Port of Los Angeles, the Port of Long Beach, or the Port of New York & New Jersey. Marine terminal operators at those ports will also be subject to information demands. The demand orders will also require ocean carriers and MTOs to provide information on their policies and practices related to container returns and container availability for exporters.

Failure of ocean carriers and MTOs to operate in a way consistent with the FMC’s Interpretive Rule on Detention and Demurrage that became effective on May 18, 2020 might constitute a violation of the Shipping Act, 46 USC 41102(c), which prohibits unjust and unreasonable practices and regulations related to, or connected with, receiving, handling, storing, or delivering property. Information received as a result of these demand orders may be used as a basis for hearings, Commission enforcement action or further rulemaking.

In a statement issued February 18, 2021, FMC Commissioner Carl Bentzel gave his strong support for the decision to move forward with the information demand orders. He noted “many of the challenges to our supply chain have been unforeseeable. In this time of operational duress, it is important that ocean carriers, marine terminal operators, and shippers honor their responsibilities in the legal obligations related to detention and demurrage. Detention and demurrage are intended to provide an incentive for the pickup of cargo, and the redelivery of equipment to ensure efficient operation, not to function as a separate revenue stream when operations break down.”

Commissioner Bentzel expressed his concern about issues surrounding the implementation of detention and demurrage by ocean carriers and noted the possibility “that shipping lines are intentionally avoiding providing export of U.S. goods and manufactures in the rush to get empty cargo containers to Asia to provide carriage of imports.” In December 2020, Commissioner Bentzel and Commissioner Daniel Maffei wrote a joint letter to World Shipping Council President and CEO John Butler expressing their concern about reports that some ocean carriers have recently refused to carry U.S. exports. The Commissioners wrote that U.S. exporters should not bear the entire burden of volume fluctuations and surges and emphasized “it is imperative that we strive for a balanced trade to keep our supply chain fully effective and efficient while maintaining vital export opportunities for the U.S. agriculture and manufacturing bases.”

Transpacific Eastbound Carriers Adjust Fuel Surcharges Effective April 1, 2021

Several carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective April 1 through June 30, 2021. Details are as follows. Here is a table of BAF amounts posted by carriers:

TRANSPACIFIC EASTBOUND (Asia to USA)
BUNKER ADJUSTMENT FACTOR (BAF), Apr – Jun 2021, in USD, per 40ft ctr, except as noted below
Carrier
To US Atlantic/Gulf Coast Ports
To US Pacific Coast Ports
To IPI/MLB via US Pacific Coast
Dry
Reefer
Dry
Reefer
Dry
Reefer
CMA CGM
(see notes 1, 6)
806
967
469
0
469
0
COSCO
909
1364
472
708
472
708
Evergreen
(see note 6)
803
1160
348
554
348
554
HMM
(see notes 2, 7)
921
534
734
ONE
(see notes 3, 6)
64
102
40
56
204
220
OOCL
(see notes 4, 7)
815
1375
450
759
647
1092
Yang Ming
(see note 6)
376
541
202
291
202
291
ZIM
(see notes 5, 6, 7)
679
1018
397
595
397
595

NOTE 1: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF03), tariff Rule No. 010.08.

NOTE 2: HMM calls the above charge the Bunker Charge, tariff Rule 2-63. The above amounts are effective March 1, 2021 until further notice.

NOTE 3: ONE calls the above Bunker surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within tariff Rule No. 102.001, whether as an exception or as a reference to this charge. The above rates have been in effect since Jan 1, 2021.

NOTE 4: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge above is effective March 1, 2021 until further notice. The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate.

NOTE 5: ZIM calls the above Bunker Charge the New Bunker Factor – Far East (NBF), Rule 010-NB. The NBF is effective March 1, 2021 until further notice. Service contract cargoes subject to Carrier’s published BAF and/or EBS shall not be subject to NBF.

NOTE 6: Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 7: Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

Transpacific Eastbound Carriers File GRIs Effective March 15 and April 1, 2021

Several leading carriers serving the Trans Pacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective March 15, 2021, including CMA CGM, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The March 15th GRIs will be the sixth GRI of 2021 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective March 15, 2021
Carrier
in USD, per 40ft ctr
CMA CGM
1000
Evergreen
1000
Hapag Lloyd
1200
HMM
1000
ONE
1000
Yang Ming
1000
ZIM
1000

Some carriers updated their tariffs to include new General Rate Increases (GRIs) effective April 1, 2021, including CMA CGM, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The April 1st GRIs will be the seventh GRI of 2021 for the East Asia/USA trade lane.

TRANSPACIFIC EASTBOUND (Asia to USA)
GENERAL RATE INCREASE (GRI)
Effective April 1, 2021
Carrier
in USD, per 40ft ctr
CMA CGM
1000
Evergreen
1000
Hapag Lloyd
1200
HMM
1000
ONE
1000
Yang Ming
1000
ZIM
1000

Transpacific Westbound Carriers Update Fuel Surcharges Effective April 1, 2021

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the April to June 2021 quarter. Here is a table of carriers that have posted BAF amounts:

TRANSPACIFIC WESTBOUND (USA to Asia)
BUNKER ADJUSTMENT FACTOR (BAF), Apr – Jun 2021, in USD, per 40ft ctr, except as noted below
Carrier
Dry Cargo
Reefer Cargo
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
From US Atlantic/Gulf Coast Ports
From US Pacific Coast Ports
CMA CGM
(see notes 1, 7)
60
30
110
80
Evergreen
(see note 7)
191
96
407
217
HMM
(see note 2)
179
253
1502
898
ONE
(see notes 3, 7)
30
20
68
36
OOCL
(see notes 4, 8)
91
74
137
111
Yang Ming
(see notes 5, 7)
140
84
541
291
ZIM
(see notes 6, 8)
68
40
102
60

NOTE 1: CMA CGM calls the above Bunker surcharge the Bunker Adjustment Factor Surcharge (BAF-03), tariff Rule No. 010.4.

NOTE 2: HMM has applied the above Bunker Surcharge (BUC) Rule No. 10-02A since October 1, 2020.

NOTE 3: ONE calls the above Bunker surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within tariff Rule No. 102.001, whether as an exception or as a reference to this charge. The above rates have been in effect since Jan 1, 2021.

NOTE 4: OOCL calls the above Bunker surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge above is effective March 1, 2021 until further notice. The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate.

NOTE 5: Yang Ming calls the above Bunker surcharge the New Bunker Charge, rule number 10-AH.

NOTE 6: ZIM calls the above Bunker Charge the New Bunker Factor – Far East (NBF), Rule 010-NB. The NBF is effective March 1, 2021 until further notice. Service contract cargoes subject to Carrier’s published BAF and/or EBS shall not be subject to NBF.

NOTE 7: Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 8: Updated on a monthly basis.

Each carrier maintains its own tariffs and controls its own pricing.

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