NFI letter to FMC addresses clogged ports, surcharges
The following is a letter dated 26 November 2014 from the U.S.-based National Fisheries Institute to the Federal Maritime Commission regarding the backlog of shipments at key U.S. West Coast ports, such as Los Angeles. Not only are seafood importers’ shipments are being delayed, but some are incurring congestion surcharges.
The Honorable Mario Cordero, Chairman
Federal Maritime Commission
800 North Capitol Street, N.W
Washington, D.C. 20573
Dear Chairman Cordero:
We write to express concerns regarding recent surcharges ocean carriers are imposing on shippers at numerous West Coast ports. There is evidence to suggest that some of these surcharges are improper or even unlawful. The National Fisheries Institute (“NFI”) and the companies listed below urge you, consistent with your recent public statements, to scrutinize these charges in order to ensure that they comport with the Shipping Act and FMC regulations.
NFI is the nation’s leading seafood trade association, representing the full range of the commercial seafood supply chain, including importers, processors, harvesters, distributors, retailers, and restaurants. Our importer companies supply American families with billions of seafood meals every year and are responsible for a substantial portion of the fish Americans eat every day. These companies depend on an efficient and reliable transportation system, especially on the West Coast and especially during a time of year when seafood consumption rises.
Ocean carriers at West Coast ports have announced congestion surcharges ostensibly justified by “labor unrest.” In some instances, these surcharges have not been properly and timely notified to shippers; in other cases, the surcharges may not be justified at all. The Commission’s November 17 statement emphasized the limits of such surcharges:
Many carriers previously published in their tariffs advance or conditional notice of an intention to implement surcharges in the event certain conditions are experienced. All such carrier tariff rules, however, must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to ‘labor unrest.’ The rules applicable to any given shipment shall be those in effect on the date the cargo is received by the common carrier or its agent. (cited link)
You were quoted in a November 18 report as stating that the FMC staff “is looking into whether there’s a trigger mechanism that is legitimate to even apply the surcharges.” (cited link)
In light of all this, we are concerned that labor negotiations at West Coast ports are a mere pretext for imposition of surcharges that in other circumstances the Shipping Act would prohibit, a conclusion that is buttressed by the fact that numerous carriers reacted to the Commission’s focus on this issue by delaying or even abandoning their surcharges soon after announcing them.
As they do with other commodity sectors, our food service, grocery and big box retailer, and restaurant partners require their seafood suppliers to aggressively control costs. That is particularly true in what is an extraordinarily tight recovery. Surcharges of the magnitude our companies are being forced to pay not only erode the competitiveness of our industry; they also harm the cold storage, trucking, insurance, financial services, and other downstream businesses that support commercial seafood. That is why we applaud your scrutiny of the West Coast situation, and why we urge you to make clear to carriers that they may consider surcharges only when all Shipping Act requirements have been met.
National Fisheries Institute
Beaver Street Fisheries, Inc.
Bonamar Corp. Bumble Bee Seafoods Central Seaway Company, Inc.
Chicken of the Sea Frozen Foods
Eastern Fish Co. LLC
F. W. Bryce, Inc. Fortune Fish & Gourmet Great American Seafood Import Co. H & N Group, Inc. Harbor Seafood, Inc. International Cargo Loss Prevention, Inc.
Los Angeles Cold Storage Company
Maritime Products International Mark Foods, Inc. Mazzetta Company, LLC NOVA Fisheries, Inc. Orca Bay Seafood, Inc. Ore-Cal Corporation Pacific American Fish Company Rich Products Corporation Rubicon Resources, LLC
Seabreeze Seafoods International
Seafood Exchange of Florida, Inc.
Slade Gorton & Company, Inc.
South Fresh Aquaculture, LLC
State Fish Company, Inc.
Trident Seafoods Corporation
Twin Tails Seafood Corporation
West Coast Seafood Processors Association
Williams Clarke Company, Inc.
cc: Commissioner Rebecca F. Dye
Commissioner Richard A. Lidinsky, Jr.
Commissioner Michael A. Khouri
Commissioner William P. Doyle