Maersk to Charge Up to $350 Per Container for Damages

This story appears in the April 19 print edition of Transport Topics.

Ocean carrier Maersk Line has again raised concern among truckers by slapping new administrative fees of up to $350 per container for damage-related costs on top of actual repair expenses.

Denmark-based Maersk said it would begin on May 1 to impose the fees of $150 per standard container and $350 per refrigerated box, the industry’s first such fees. Last year, Maersk began charging drayage carriers $11 daily to use its container chassis.

Maersk notified customers late last month that they would be charged with the new fee if the container was damaged while in their control, spokeswoman Mary Ann Kotlarich told Transport Topics. The fees are meant to cover the cost of moving damaged boxes, putting a replacement in service, repair-related paperwork and recouping costs now paid by the company.

“I don’t know how they came up with those numbers,” said Tom Adamski, chairman of the Bi-State Harbor Carriers Conference, a port trucking group in the New York area. “That is going to cause an argument.”

Adamski said if drayage carriers were charged the damage fee, truckers would have to pay out of their own pockets because almost every trucker has high deductibles.

Adamski also questioned how Maersk could justify charging the same fee for repairing a roof, which can take up to two weeks, and fixing a hole in just a few hours.

Maersk has been moving to raise revenue since posting a $1.6 billion loss on ocean shipping — its first since World War II.

Last year, Maersk said its chassis rental fee will boost industry efficiency. East Coast carriers protested, saying they had no practical way to recover the fee, which increased their costs.

“There are a lot of fundamental questions about how they are going to implement this kind of fee,” said Peter Gatti, senior vice president at the National Industrial Transportation League, which represents freight shippers.

“For intermodal cargo, how are you going to determine who damaged the container?” Gatti asked, adding that he hadn’t seen the Maersk notice.

During an intermodal shipment, truckers, terminal operators and storage yards also handle the container in addition to the ocean carrier, shipper and receiver.

Gatti said it wouldn’t be fair to charge the customer who ships the product when the ocean carrier has no way to know who actually caused damage.

“Damaged containers result in a lot of inefficiencies in the trade with extra rehandling, lift-on/lift-off, transport, administration and repairs,” Kotlarich said.

Kotlarich did not say how Maersk would determine who damaged the equipment while it was outside their terminal, and she could not provide figures on how often containers are damaged enough for the fee to be imposed.

She said the charge “will only be levied on exceptional cases when the customer has damaged our containers,” without defining an exceptional case.

Container damage typically is handled under the terms of a uniform agreement for equipment interchange between ocean and drayage carriers, several industry officials said.

“The issue of who damaged the equipment has always been around,” said Curtis Whalen, executive director of the Intermodal Motor Carriers Conference of American Trucking Associations.

“We’ve been making slow, steady progress on damage issues” through the industrywide agreement, he said.

Fleet executives such as Dave Manning, president of Tennessee Express, Nashville, Tenn., and Kevin Lhotak, president of Reliable Transportation Services, Chesterton, Ind., said they were unaware of the new container damage fee.

“It makes me nervous that the rest of the industry will follow suit,” Lhotak said. “They are trying to make the chassis and container into a revenue source to offset the costs of repairs.”

“We sincerely believe the [out-of-service] charge is the fairest way to cover the costs of damaged containers — as it means that only parties who are responsible for damage will have to shoulder the costs,” the company’s March 30 statement said.

Maersk’s chassis fee is being charged in the Northeast, mid-Atlantic and Midwest regions, with 960 drayage firms participating.

Adamski also said the chassis fee was excessive, since a drayage carrier can lease equipment daily for a few dollars less by using pools.

The container fee will be charged in every other country served by Maersk. The chassis fee isn’t charged outside the United States because drayage carriers everywhere else in the world own their own chassis and use them for freight from all steamship lines.