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January 31, 2019 3:15 PM, EST

Industry Groups Object to New Chassis Fees Taking Effect at Ports

Trucks arrive with containers to be loaded onto a ship at the Port of Charleston Trucks arrive with containers to be loaded onto a ship at the Port of Charleston. (South Carolina Ports Authority)

Transportation industry groups are criticizing a plan by some ocean carriers to begin seeking new administrative fees for cargo containers, known as “street turns.”

The fees are set to take effect Feb. 4 and range from $30 to $75, depending on the carrier.

Historically, truck drivers have picked up fully loaded containers at ports and delivered the contents to a warehouse or intermodal facility without being charged a fee. The cost of using the ocean carrier’s container has been built into the shipping contract. Oftentimes, drivers would either fill the container with goods from that facility or another one and return to the port with a load to be exported. This is called a street turn. Under the new fee structure, ocean carriers will begin charging drivers the fee if they come back into the port with a loaded container.

A crane lowers a Maersk shipping container at the Port of Los Angeles.

A crane lowers a Maersk shipping container at the Port of Los Angeles. (Port of Los Angeles)

On top of the added expense, industry groups fear the fees will worsen congestion by clogging roads with trucks driving empty containers back to the ports simply to avoid the fee.

“The fees imposed on street turns must be one of the least constructive, poorly considered steps conceivable,” the Agriculture Transportation Coalition said in a statement provided to Transport Topics. “It injures all, including the carriers themselves, by adding congestion and delay which already makes marine terminals at some of our largest ports the greatest challenge to the U.S. export/import supply chain. Penalizing street turns threatens one of the only measures available to shippers, carriers, terminals, [and] truckers to address the unending congestion.”

The exchange of equipment between ocean carriers, truckers and other providers is managed by the Uniform Intermodal Interchange Agreement, which is administered by Intermodal Interchange Executive Committee. The 10-member group is made up of various industry representatives.

Dave Manning

Manning

Dave Manning, president of motor carrier TCW in Nashville and a member of the committee, told Transport Topics that the fees from ocean carriers Hyundai Merchant Marine and Zim American Integrated Shipping Services were put into effect without a roll-call vote since the committee’s administrative procedures did not require one.

“We, the motor carriers, all objected, but we were told that because the fees didn’t conflict with language in the Uniform Intermodal Interchange Agreement, and because they are commercial terms they would be approved,” said Manning, who is also immediate past chairman of American Trucking Associations.

“Allowing [Zim and Hyundai] to implement these unnecessary, burdensome fees on street turns will only increase congestion and reduce efficiency,” added Jeff Bader, president of the Port Newark, N.J.-based Association of Bi-State Motor Carriers, which represents 170 trucking and industry-related firms doing business at the Port of New York and New Jersey. The group also manages a members-only street turn forum where companies can post information about available equipment or equipment needs. He added that the fee plans are “a clear violation of the goals and directives announced last month by the U.S. Environmental Protection Agency, which is set to release approximately $40 million [in] grant funding to implement projects aimed at reducing truck diesel emissions.”

The American Association of Port Authorities said it is, at the moment, not taking a position on the issue. In a statement provided to TT, the group said it and its member U.S. ports are “aware of the street-turn issue and we are monitoring it closely.”

The ocean carriers defend the fees by saying the revenue will cover the costs of the complex task of tracking their equipment, something they say the shipping industry has been absorbing for years.

Weston LaBar

LaBar

Weston LaBar, CEO of Long Beach, Calif.-based Harbor Trucking Association, told TT that street turns are seen as “low-hanging fruit” for terminal operators. “Every port authority that I talk to either has a plan or is looking at a plan to maximize street turns for exports in their gateway, and this is one extra thing that makes it difficult for truckers,” he said.

It was not immediately clear how Hyundai Merchant Marine and Zim American will collect the fee. In a letter obtained by TT, Maersk informed its trucking customers that it will administer a $30 fee through a third-party software company called Avantida that handles empty-container management in the United States and Canada.