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Carriers Implementing Fees for No-Show, Rolled Shipments

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Date:2011-07-15
APL, Maersk both moving towards new system of service

Ocean carriers are moving toward space and volume guarantees in agreements with shippers that include fees on both shippers and carriers if either side fails to meet the commitments spelled out in the agreements.

APL included such guarantees and mutual penalties in some trans-Pacific contracts with shippers this year. ¡°There are a number of contracts this year where we wrote service guarantees into the contract, where we have a certain on-time performance guarantee and a certain space allotment by customers,¡± said Bob Sappio, APL¡¯s vice president of Pan-American Trades.

\"\" By the Numbers: Container Rate Benchmark.

¡°If a customer fails to meet that space allotment within a window of tolerance, it will pay a penalty, and likewise if we fail to meet the service guarantee or the space allotment, we would be required to pay the customer a penalty,¡± he said. \"The penalty is several hundred dollars per dry container.¡±

Maersk Line is developing a similar plan that it will start to roll out on select trade lanes in the third quarter and globally by mid-summer next year. The plan includes what Maesrk calls calls a ¡°load protection fee¡± on shippers that fail to deliver booked containers to the port of departure and a similar fee it would pay to shippers for booked containers that are not loaded on outbound Maersk ships.

¡°We will roll it out on a rifle-shot basis on trades that are ready for it, and not just on a big bang rollout,¡± said John Nielsen, Maersk Line¡¯s senior director of charge management, network and product. Under the plan, Maersk would allow a grace period for changes or cancellations by the shipper until seven days before the booked departure from the first load port, he said.

¡°From then on changes to a booking hurt our planning, therefore we will apply a charge on all reductions of booking or moves or cancellations or no-show,¡± he said. The charge would be $100 per dry container and $500 per reefer container.

Similarly, Maersk will pay the same charges to a shipper for a container that it fails to load on the scheduled ship. ¡°It¡¯s a quid pro quo,¡± said Nielsen.

He said Maersk will make final a decision on the schedule for the rollout in the third quarter, based on pilot tests conducted this year in Sweden, Germany and some Latin American countries. It also conducted a pilot with a nominal $10 per container fee for no-show or rolled export containers in the Pacific Northwest last year.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.

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