A shipping surcharge scheduled to take effect 20 February because of excessive port congestion on all cargo coming into George Town has been officially postponed, a manager of Thompson Line confirmed Friday.
However, trade manager Anna Koldys said the measure could still be implemented if the situation with containers does not improve.
‘The postponement is until Sunday, March 20th, at which time we will re-evaluate the situation,’ she said.
Ms Koldys said the Thompson Line never wanted to impose the surcharge, but it was forced to put the process in motion in December because of severe congestion at the port.
‘One of our boats took eight days to get in and out of George Town,’ she said. ‘Another took six days.’
The delays were costing the Thompson Line large amounts of lost revenue because schedules were not met.
The company remained hopeful the port congestion would ease after Christmas, but just in case it did not, the senior management of Thompson Line decided to be prepared.
Ms Koldys said the United States shipping industry is heavily regulated by the Federal Maritime Commission, and any increase in tariffs requires 30-days forward filing.
Thompson Line assessed the situation at the port after the holidays, noticed a big improvement, and decided to hold off on the surcharge.
The company never intended to publicly announce the surcharge until it determined it would actually impose it.
Ms Koldys said Thompson Line was surprised when Seaboard Marine issued a press release on 21 January announcing the surcharge would be imposed.
That press release remained posted on Seaboard’s website through Saturday, but Robert Foster of the company’s Cayman office said last week the surcharge would not be implemented.
Although the Thompson Line’s ships are now back on schedule, it is still experiencing difficulties with its Cayman route, Ms Koldys said.
‘We are happy with what we’ve seen so far,’ she said. ‘The improvements made at the Port are all very significant. But until the number of empty containers returning on our ships is able to exceed the number we brought in, things will never improve enough.’
It is because of the container situation that the port congestion fee surcharge has only been postponed and not cancelled, Ms Koldys indicated.
‘Right now, we have 255 flat-rack containers in Grand Cayman, which is more than our entire allotment,’ she said, adding that Thompson Line had to turn away business this week on another route because there were no flat-rack containers.
Ms Koldys said the Thompson Line has made many concessions on its container policies in light of the situation created by Hurricane Ivan.
Prior to Ivan, Thompson Line allowed five working days for containers to be returned before a late fee, called a demurrage charge in the industry, was assessed.
In the immediate aftermath of Ivan, the Thompson Line suspended all demurrage charges at first.
Later they instituted a policy whereby customers were allowed 14 calendar days to return the containers.
Delays at the Port before the improvements made that schedule impracticable and many containers did not come back in the allotted 14 days.
Thompson Line has no choice but to impose the demurrage charge at this point, Ms Koldys said.
For dry containers, the demurrage charge will be US$20 per day for the first seven days past the allotted 14 days. After that, the charge will be $40 per day.
For all other containers, including refrigerated containers and flat-racks, the demurrage charge will be $60 per day for the first seven days after the allotted two weeks, and then $120 per day after that.
Regardless of the demurrage charge, if the container situation does not rectify itself by 20 March, Thompson Line might be forced to impose the port congestion surcharge.
‘We want to be sensitive to Cayman’s situation, and we want to be fair,’ said Ms. Koldys. ‘But every company has a right to have a bottom line.
‘Our intent is not to have to implement the surcharge. We just want our equipment back,’ she said.