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June 23, 2014

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FORWARDERS PRESS FMC FOR SURCHARGE CLARITY CUSTOMS BROKERS AND forwarders are ask- ing the U.S. Federal Maritime Commission to create procedures to help them better handle potential work stoppages at U.S. West Coast ports. Although the FMC in late May issued an advisory on possible port congestion surcharges levied by carriers, the tariff publications and announcements published so far don't pro- vide enough clarity to the shipping community, the National Customs Brokers and Forwarders Association of America wrote in a June 5 let- ter. Trans-Pacific carriers have filed plans for congestion surcharges or plan to reactivate ones already on file with the FMC if the International Longshore and Warehouse Union engages in work stoppages or slowdowns amid contract negotiations with waterfront employers. Carriers' planned congestion surcharges, however, "are so indefinite as to be inconsistent with the commis- sion's regulations pertaining to the need to provide the public with accurate, reliable and useful infor- mation concerning the charges to be assessed," NCBFAA Counsel Ed Greenberg wrote in the letter to FMC Chairman Mario Cordero. C A RG O I N T E R E S T S , S H I P P I N G lines and railroads have done all they can to prepare for the mid- night June 30 expiration of the Internat iona l Long shore a nd Warehouse Union contract. The t rade com munit y now hopes negotiations in San Francisco will end with an agreement reached without disruption at West Coast ports. Since the talks between the ILWU and waterfront employ- ers began on May 12, nothing has happened to cause undue concern. Negotiations "are ongo- ing and positive," Jim McKenna, president of the Pacific Maritime Association, which is negotiating on behalf of shipping lines and ter- minal operators, said on June 10. A previous joint statement by the ILWU and PMA expressed the same sentiment. The trade com- munity, of course, would welcome more detailed information on what is happen- ing behind closed doors in San Francisco, but releasing sound bytes from the negotiations isn't the style of the PMA and ILWU. Cargo interests that ship through West Coast ports are taking nothing for granted. Some shippers are diverting cargo through ports in Canada and the U.S. East Coast. In a JOC survey in May, about two-thirds of the respondents said they would divert at least some of their cargo as the contract deadline approached. A num- ber of shippers have maintained their normal routing through West Coast ports but have moved product earlier than usual. Container volumes through Los Angeles-Long Beach were up about 10 percent in April compared to the same month last year. The Southern Cali- fornia gateway handles more than 60 percent of the container traffic on the North Ameri- can west coast. The import rush will push U.S. containerized imports up 7.5 percent in June, according to Global Port Tracker, a monthly container forecast provided by the National Retail Federation and Hackett Associates. The next important development could come on July 1. Speaking at the JOC's TPM Confer- ence in March, McKenna warned the trade not to expect an agreement by July 1. Negoti- ating tactics are such that a missed deadline is perceived as giving both sides leverage. That's especially true for the union, because the "no- strike" clause in the existing contract expires along with the contract. If negotiators believe they are close to reaching an agreement, how- ever, they could extend the no-strike clause for a week or two. Early July is usually uneventful anyway because it's a heavy vacation period. But if negotiators are far apart on key issues, they may let the no-strike clause expire — and then all bets are off. WITH TIME RUNNING OUT, IS NO NEWS GOOD NEWS ON THE ILWU? Spotlight 6 THE JOURNAL OF COMMERCE JUNE 23.2014 6 THE JOURNAL OF COMMERCE Releasing sound bytes from the negotiations isn't the style of the PMA and ILWU.

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