February 27, 2018
What are Ocean Carriers Doing About Store Door Delivery (SDD) Services?
In light of the trucking challenges across the United States related to ELD and its impact on the market, we wanted to provide some insight into how ocean carriers are reacting.
CMA and Emergency Intermodal Surcharge: Effective March 13th, 2018 CMA will begin to assess an Emergency Intermodal Surcharge of $300 per container (regardless of size) when CMA is performing the door delivery service. At this point, CMA will only be assessing this surcharge when they are performing the door delivery service from the following ramps/ports: Chicago, Houston, Savannah, Memphis and Columbus. Should trucking conditions continue to deteriorate through the spring and summer, CMA reserves the right to expand the geographic scope of this surcharge.
MSC: We have begun to receive notifications from overseas MSC offices that MSC will no longer effect door delivery services in the United States until further notice. All bookings moving forward are to be to CY Port/Ramp only. In the communication we have received, there has not been any location exemptions or exclusions.
Maersk and Hamburg-Sud: Maersk (along with Hamburg-Sud) has been communicatingwhere they are experiencing severe delays in procuring dray capacity, with some locations (and for US Export) experiencing a 7+ day delay in securing capacity.
Carriers Unable to Perform the SDD Service: We are experiencing many situations where ocean carriers who have contracted with dray companies to perform trucking services are not able to find capacity at the previously negotiated rate levels. With truck capacity so tight, trucking companies are simply not willing to accept the dispatch without a significant increase. This is leaving some BCOs with ocean containers accruing demurrage as they wait to find alternative capacity.
Ocean Carrier and Service Contracts for 2018-19 season: As we approach the traditional TPEB contract season for 2018, one significant change will be the reluctance of ocean carriers to include door delivery services and rates in the annual contracts. Those that will include trucking services will no doubt include language that allows the trucking rate levels to be reevaluated periodically. However, for ocean carriers, simply having flexibility in the rate levels in the contract doesn’t address or solve issues like demurrage, congestion, and chassis availability that are all exacerbated by ELD and current market conditions.
Laufer’s Position Regarding ELD: We at Laufer perform a significant number of import and export ocean drays for our customers – well over 25,000 per year (out of 70,000+ containers that are moving through our network annually). We haven’t seen a disruption in services like what we are experiencing today since Hanjin’s bankruptcy in 2016, and there is no immediate relief that we can foresee. In order to better understand what is truly happening with trucking capacity and the challenges posed by the new ELD regulation (and a host of other issues impacting trucking today), we at Laufer created a small Trucking Council of local, regional and national carriers as an advisory and feedback group. Our goal is to inform our teams internally as well as our customer community what the trade is experiencing, how this is impacting you, and what solutions there may be moving forward.
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