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Arlington, VA |
FOR IMMEDIATE RELEASE Susannah Williams swilliams@acd-chem.com |
Arlington, VA – Today, the Alliance for Chemical Distribution (ACD) sent letters to the Federal Maritime Commission (FMC) and the Surface Transportation Board (STB), encouraging the agencies to scrutinize carriers for the recent rise in surcharges in response to the military conflict in the Middle East. ACD also raised concerns about the additional rail surcharges that could follow, which would further impact the U.S. supply chain and economy.
In the letter to the FMC, President and CEO Eric R. Byer highlighted how ACD members have already received surcharges from ocean carriers, citing fuel costs and risks associated with the conflict – even for routes outside of the Middle East.
“ACD is particularly concerned about the rise in surcharges, given the history of ocean carriers leveraging crises to increase profits rather than recovering costs. ACD members experienced this during the COVID-19 pandemic, the height of the Red Sea crisis, and the East Coast port strike. There is no visibility into the rationale used by ocean carriers to determine the amount of each surcharge or which route to have it apply. Moreover, force majeure is often invoked without appropriate justification to bypass 30-day notice requirements. This forces shippers to pay the fee or forgo shipping their cargo, even when surcharges are excessive or apply to unaffected routes.”
Byer also warned against the additional surcharges ACD members could face from freight rail.
“These issues significantly impact intermodal shipments, as freight rail carriers often impose additional surcharges, forcing intermodal shippers to pay a second wave of fees. The ambiguity in regulatory oversight of rail carriers during intermodal shipments makes this a difficult issue for shippers, who have little recourse when these surcharges may be improper.”
Finally, Byer outlined larger economic consequences if ocean carriers restrict shipments of the necessary, hazardous materials used in everyday products.
“During previous times of crisis and capacity shortages, it has been common for ocean carriers to refuse to ship hazardous materials to prioritize more favorable cargo. This has had a devastating impact on ACD members who are unable to ship their products, while also causing their customers to pause manufacturing of goods that use their inputs. It has contributed to shortages during the COVID-19 pandemic, and we fear a similar situation could occur here if ocean carriers begin refusing to ship hazardous materials.”
Byer concluded by encouraging the FMC and STB to continue using their authority “to protect American shippers amid ongoing economic uncertainty.”
To read the full letters sent to the FMC and the STB, click here.
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