Shipping lines invoke force majeure due to US East Coast port strike

Denmark’s Maersk and COSCO have announced a local Port Disruption Surcharge due to a strike, which commenced on October 1.The contract between United States Maritime Alliance, Ltd. (USMX) and the ILA expired on September 30, and the ILA members went on strike the next day.

All major terminals in the US East and Gulf Coasts will remain closed for the duration of the strike, which is unknown at this time. APL said it would proactively implement contingency plans and remains fully committed to supporting customers by addressing potential disruptions through flexible and effective solutions. Due to the impacts of the strike, APL is invoking Term 10 of its Bill of Lading and may charge any additional operational costs associated with vessels delayed due to the strike to cargo on the water as of October 1, 2024, with a US East or Gulf Coast port of discharge.

This means carriers have the right to alter the route or method of transporting the goods to the intended port of discharge or delivery place mentioned in the bill of lading using any alternative route available for which the carrier can charge additional freight, including extra charges for war risks.

For all cargo received on or after October 11, 2024, a Local Port Charge (LPC) will apply as per the governing tariff(s). Cargo received on or after October 11, 2024, will not be subject to additional operational costs under Term 10(a) as described above, the line said.

CMA CGM also issued a similar force majeure advisory to the trade.

Additionally, both lines said that free time will be extended for containers within the free time available at the time of the strike. This is for a period equal to that of the terminal closure. Further, demurrage will be suspended for containers in demurrage at time of strike for the duration of the terminal closure and will resume assessment at the rate tier level in which assessment was suspended.

Maersk said due to potential labor disruptions, it is implementing a local Port Disruption Surcharge for all cargo moving to and from the US East Coast and Gulf Coast terminals. The charge amount per equipment size will be $1,500 for a TEU (twenty-foot equivalent unit); $3,000 for a 40-ft container and $3,780 for a 45-ft container. This charge may be imposed as of October 21, 2024, depending on the impact of the disruption to the supply chain. This surcharge is necessary to cover the higher operational costs that will be incurred due to the service disruptions, ensuring the sustainability of our services and ongoing support for your supply chain requirements, the line said.

COSCO has announced a congestion surcharge from mid-October. For 40-ft containers, it will charge $1000 from Europe; $2000 from Latin America, and $3375 Asia and Africa. An official in a leather company said all the other lines will also issue a similar advisory in the days to come if the strike continues.