US importers face stark gulf in fees when Hanjin stranded ships return

Bill Mongelluzzo, Senior Editor | Sep 07, 2016 9:17PM EDT

hanjinLocating cargo lost on Hanjin vessels was just the beginning for shippers, who must also deal with different approaches among terminals and ports when those ships finally arrive at their destination.

When five Hanjin ships now stranded off US coasts call at marine terminals in the US, importers will find stark differences in how much they have to pay to get containers released. The different approaches are already evident in how ports are handling stranded import containers.

There are three Hanjin container ships stranded in San Pedro Bay, one outside of Savannah and another waiting to call the port of New York and New Jersey. A US bankruptcy court in Newark, New Jersey, is slated to rule on Friday, when temporary court protection from arrests expires, whether to extend Chapter 15 privileges, protecting Hanjin assets and ships from seizure.

In Los Angeles-Long Beach and New York-New Jersey, which are landlord ports, the private-sector terminal operators decide if they will allow a vessel to dock at their facility and how and when to release laden import containers. In most cases, they are demanding that beneficial cargo owners pay them up front for cargo-delivery charges before they agree to release the containers to truckers.

In Savannah, by contrast, the operating port manages the marine terminal, and the Georgia Ports Authority is not charging BCOs to release Hanjin containers. It also isn’t charging demurrage on exports that were slated to sail on Hanjin.

“We want to make sure cargo is fluid. We want our BCOs to be able to stock their shelves. This is peak season and we don’t want to interrupt their supply chains,” said Griff Lynch, executive director of the Georgia Ports Authority, noting that it’s not consignees of Hanjin cargo at fault for the Korean line’s plight.

Savannah can’t discharge the Seaspan Efficiency, with a capacity of 4,600 twenty-foot-equivalent units, until pilots and tugboat operators are paid. The ship has been waiting since Saturday to call Garden City Terminal.

To the north, the South Carolina Ports Authority has waived the non-vessel delivery fee for export loads out-gated. At the Port of Charleston, an operating port, import loads discharged on or after Sept. 1 will be placed on hold until such time as all SCPA charges are settled. The SCPA will collect all port and throughput charges totaling $350 per container from the BCO/responsible party with authorization required from Hanjin.

The only North American port to actually work a Hanjin vessel on Wednesday was Prince Rupert, British Columbia. The Canadian port began discharging containers from a Hanjin vessel on Wednesday. The Hanjin Scarlet had been anchored off the coast since Hanjin filed for bankruptcy protection last week.

That is in contrast to Total Terminals International, which is owned jointly by Hanjin and Terminal Investment Ltd., the terminal operating sister company of Mediterranean Shipping Co. The Port of Long Beach reported Wednesday that the terminal reopened for delivery of imported containers to truckers, as long as the beneficial cargo owners paid the terminal delivery charges up front, but no vessels were docked at TTI. The port could not say why the terminal was refusing to accept Hanjin ships.

US Marshals have seized the Hanjin Montevideo at Long Beach at the behest of fuel suppliers owed nearly $800,000, according to local media. The Hanjin Greece, which had been anchored outside the Los Angeles-Long Beach port complex earlier in the week, is now in Mexican waters to use reserve fuel not allowed in US emissions control areas that mandate low fuel sulfur content.

The US District Bankruptcy Court in Newark, New Jersey, late Tuesday provided temporary protection to Hanjin, which will prevent its assets from being seized by creditors. The relief lasts until Friday, when the court is expected to issue a final ruling in the matter.

The temporary protection apparently provided DP World, operator of the Fairview Container Terminal in Prince Rupert, the confidence it needed to allow the Hanjin Scarlet to proceed to berth. Kris Schumacher, port spokesperson, said the port authority Wednesday was cooperating with DP World, and Canadian National Railway, to discharge containers from the Hanjin Scarlet and deliver them via intermodal rail to destinations in Canada and the US.  “The collective group is keeping the needs of the shipper in mind,” Schumacher said.

The Hanjin Scarlet is supposed to call next at the Northwest Seaport Alliance in Seattle-Tacoma, but spokesperson Tara Mattina said that as of Wednesday the terminal in Seattle had not been notified of the expected time of arrival.

Hanjin had three vessels at anchor or floating off the Southern California coast on Wednesday, but the vessels did not dock at TTI in Long Beach or at any terminal in Los Angeles-Long Beach. The Southern California terminals reportedly were awaiting a final ruling from the New Jersey bankruptcy court on Friday before taking on the expense of working the vessels.

Terminals in Canada as well as in Southern California were delivering laden import containers Wednesday to truckers, but only if the beneficial cargo owners paid the terminal handling and delivery charges upfront. “DP World requires pre-payment for handling of all Hanjin containers,” the Port of Prince Rupert stated in a release.

Most US terminals are refusing to load Hanjin export containers onto vessels. The terminals will release the export containers to truckers, once again if the BCO pays the terminal delivery fee upfront. The BCOs then have the Hanjin containers trucked to their warehouse where the contents are transloaded into containers belonging to other shipping lines, and those containers are then delivered to the terminals where those lines call.

Hanjin import containers are scattered across marine terminals throughout the US. Some of the containers arrived on Hanjin vessels which had called at the ports before Hanjin filed for bankruptcy protection last week. Other Hanjin containers arrived at the ports on vessels operated by Hanjin’s vessel-sharing partners in the CKYHE Alliance and the other carriers Hanjin had vessel-sharing agreements with.

Truckers at ports such as Los Angeles-Long Beach and New York-New Jersey are bracing for fees that terminal operators are charging for demurrage, which is the cost of storing containers on a terminal after free time has expired, and detention or per-diem fees, which are charged for the late return of containers to the terminals after they have been unloaded at BCO warehouses. Some truckers and BCOs claimed that unusually large demurrage fees were being levied by the Maher terminal in New Jersey.

Terminal operators normally do not discuss specific incidents involving demurrage and per-diem fees because a number of circumstances are often involved, and such cases are either negotiated by the parties involved or submitted for arbitration.

Per-diem charges were a major source of contention between terminal operators and truckers in late 2014 to mid-2015 when West Coast ports sustained severe congestion during the coastwide contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. Numerous complaints were filed via the dispute resolution mechanism of the Uniform Intermodal Interchange Agreement, which is administered by the Intermodal Association of North America.

That process, while somewhat complex and time consuming, produced results. According to IANA numbers provided on Wednesday, 137 claims were filed. IANA said 17 claims were rejected because of tardy filing, 37 claims were resolved by the parties prior to assignment to an arbitration panel and 83 claims resulted in arbitration decisions.

Joni Casey, president and CEO, said IANA has already posted on its website information that truckers and others can refer to about Hanjin equipment at various terminals. Casey said truckers can also query the IANA website for information on filing for arbitration under UIIA, such as the documentation that must accompany claims and the deadlines for filing claims.

Another residual impact of the Hanjin bankruptcy is the impact it is having on chassis availability, especially in Southern California. Fred Johring, chairman of the Harbor Trucking Association, said thousands of empty Hanjin containers are sitting on chassis at warehouses and parked on streets throughout the region, in effect taking those chassis out of service because terminals are refusing to accept empty containers at their facilities. This number represents almost 10 percent of the total chassis pool in Los Angeles-Long Beach, aggravating a chassis shortage that already exists during the peak-shipping season, Johring said

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