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Carriers Consider 'Congestion' Fee

Ports: Shipping lines say the charge would offset higher costs of moving backed-up cargo.


Hoping to offset the additional cost of moving cargo through the backed-up West Coast ports, some shipping lines want to charge customers a controversial "congestion" fee of up to $1,000 per container.

But the industry is divided over whether to raise rates, particularly because it was the representatives of the Pacific-based shipping lines and terminal operators that closed the ports for 10 days before they were reopened under a federal court order Wednesday.

The Trans-Atlantic Conference Agreement, a group of European-based shipping lines, announced this week that it was filing papers with the Federal Maritime Commission to charge customers a congestion surcharge of as much as $1,000 per 40-foot container. Under federal law, carriers must file notice of rate increases 30 days before they are imposed.

That rate increase would affect only West Coast cargo headed for Europe, a small portion of the traffic. Maersk Sealand, the biggest member of the seven-member Trans-Atlantic group, said it would not charge the congestion fee.

"We don't think this is the way to come across to customers that have already felt a service impact and a financial impact," Maersk spokesman Tom Boyd said.

The Transpacific Stabilization Agreement, which represents 14 leading Pacific carriers, is assessing its costs but has not decided whether it will impose a similar fee, said Niels Erich, a spokesman for the Oakland-based group.

Shipping companies say they lost millions of dollars during the lockout of union workers from the 29 West Coast ports. The labor dispute left more than 200 ships stranded along the coast and tens of thousands of containers jammed in the terminal yards, a backlog that could take months to clear.

The ports opened Wednesday night after a federal judge granted President Bush's request for a temporary injunction under the Taft-Hartley Act, launching an 80-day cooling-off period for both sides.

The Pacific Maritime Assn., which represents shipping lines and terminal operators, ordered the lockout Sept. 29 in response to what it said were slowdowns by the International Longshore and Warehouse Union.

PMA spokesman Steve Sugerman accused the union of not dispatching to the terminals enough workers with the skills needed to handle the complex cargo-handling equipment. "We are still seeing a sluggish situation," he said. "We are trying to work with the union to get the productivity numbers up."

ILWU spokesman Steve Stallone said the PMA wasn't taking into account the tremendous congestion on the docks caused by the buildup of containers and a lack of truck chassis and rail cars to haul the goods away. "It is just a nightmare out there," he said. "All these containers are coming off the ships and there is nowhere for them to go."

At Pier 400 in Los Angeles, the largest shipping terminal in the world, two outside truckers collided Friday with union-operated vehicles because of a lack of visibility around the massive rows of containers, Stallone said.

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