Buildup of Empties at East Coast Ports Near "Emergency Level"
By Maritime Executive 9/8/22
Aug 10, 2022 - 10:10:53 AM
Shippers and truckers at America's gateway ports have alleged problems with unreturnable empty shipping containers since the start of the late-pandemic cargo boom, and the problem is becoming worse on the U.S. East Coast, according to members of the Federal Maritime Commission. Chairman Dan Maffei has reported that his office is receiving complaints from the Port of New York and New Jersey that sound much like those heard previously in California's gateway ports: ocean carriers refusing to accept box returns at the terminal, forcing truckers to store unwanted empty containers at their own expense and then pay D&D fees for the privilege. Truckers who file complaints or refuse to pay the D&D charges risk getting cut off from further shipments, drayage firms say.
That pattern is familiar, but it is getting worse and may be approaching an "emergency level," according to Commissioner Carl Bentzel.
"I understand that the problem is spreading to other east coast ports such as Baltimore, which reported to me last week that they too have an overflow of empty containers, hindering terminal operations and port fluidity. In the face of continuing surges of import cargo to the east coast, how the carriers and marine terminals manage their equipment must change," he said in a statement Tuesday. "I believe that on certain east coast ports that we need public comment to assess how carriers and their marine terminal operators manage their containers to determine whether it is now reaching an emergency level."
After a long period of surging demand and an expansion of the global inventory of container equipment, the ocean freight industry is now entering a phase of equipment oversupply, according to the box marketplace Container xChange. As markets reopen and demand softens, the oversupply is a natural outcome of demand-supply forces balancing at new levels, said Christian Roeloffs, the company's CEO, in a recent advisory. The oversupply situation does not come as a surprise because the average container prices and leasing rates have been declining globally since September-October 2021.
Recovering empties appears to be a priority still for carriers at the Port of Long Beach, where an increase in the number of outbound empty boxes boosted the port's volume to a new record for the month of July. However, at PANYNJ, the port has been compelled to introduce a new "container imbalance fee" to incentivize carriers to remove their unwanted empty boxes from the pier. The requirement is stringent: beginning September 1, container export levels (including empties) must be at least 110 percent of import levels, or the port will fine the carrier $100 per container.
We emphatically encourage ocean carriers to step up their efforts to evacuate empty containers quicker and at higher volumes to free up much needed capacity for arriving imports in order to keep commerce moving through the port and the region," said Bethann Rooney, the director for ports at PANYNJ.
If Chairman Maffei has a say in the matter, ocean carriers - which are on track to post unprecented profits this year - should also be paying drayage firms for storing their empty containers.
I will do everything in my power to ensure that carriers do not receive involuntarily subsidized storage for empty containers that belong to them, said Maffei in a statement last week. If it can be shown that a shipper or a trucker is not allowed to return a container then not only should they not be charged per diem but the carrier should compensate that trucker for the space it takes up.
Source: Ocnus.net 2022