Hapag-Lloyd, along with at least 12 other carriers, have filed tentative plans with the Federal Maritime Commission (FMC) to levy congestion surcharges on shipments to and from the United States in the event that work stoppages occur during negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association.  Contract negotiations are scheduled to begin May 12.  The current contract expires on July 1.

Hapag-Lloyd informed its customers recently and stated in a press release that it will be prepared to implement a congestion surcharge beginning June 10, if conditions at North American ports generate additional costs for its operations.  Tentative surcharges announced by Hapag-Lloyd are $800 per 20-foot container, $1,000 per 40-foot container, and even higher surcharges for containers with larger capacities.  Some carriers are not filing surcharges, but are informing customers that they have congestion surcharges on file with the FMC and those charges will be activated if congestion problems arise.

During a lengthy work stoppage on the West Coast, vessels could back up at the ports with nowhere to go because most of the vessels arriving at West Coast ports are too large to transit the Panama Canal.  Also, intermodal trains would back up, and equipment would begin to generate per diem charges.  Some shipments could be diverted to ports in Canada and Mexico, but there is a cost involved in re-routing cargo.  Prudent shippers who decided earlier this year to re-route some of their cargo to the East Coast made arrangement to do so months in advance.