TOC LOGISTICS INTERNATIONAL INC offers this supplemental market update from our previous notice of under capacity and shortage of drivers in the US Trucking and Drayage Market;
The snowball effect resulting from the following current conditions, has reached critical mass:
- Heavy gate congestion
- A chronic lack of truck power (reduction of available drivers due to eLog enforcement)
- A near zero availability of chassis’ at major ports and inland CY’s
- Bunching of inbound trains ( including trains being held indefinitely at switching yards, due to no space to receive them at the next stop )
- Lack of available railcars for ocean containers at inland ports
- Increased container volumes, both import and export
- Heavy snowfall and loss of yard storage
Vessel operators are now claiming FORCE MAJEUR in major ports and refusing to provide origin/destination “door” moves, leaving the NVOCC, Forwarders and, yes, even the BCO’s, to fend for themselves to get containers either delivered to the port or delivered to the end customer.
Vessel operators who have not claimed FORCE MAJEUR, have announced a line item increase to contracts of at least $300 per container to continue managing “door” moves under their existing contracts.
Further, because of the lack of availability of equipment, “dwell times” ( the number of days it takes for a container to be pulled from the port ) have risen, nationally, to 7-10 days; this is particularly important to understand because there are TWO surcharges at risk of being applied with this increased dwell time:
- Free days at the port hover around 5 days nationally; thus an extended dwell time causes port storage to kick in;
- Demurrage ( the number of days the container is away from the port before being returned ) has an industry standard of only 2-3 days, thus the extended dwell times and lack of actual equipment for either the delivery or empty return is now triggering per day demurrage charges.
Regarding demurrage charges, until now, these charges could be waived or greatly reduced so as not to affect the supply chain spend to volume customers; but now, in order to manage the increased costs of the current under-capacity market, vessel operators are applying demurrage without exception.
TOC Logistics International Inc must officially announce here that all demurrage charges by the vessel operators, NOT caused by negligence of TOC Logistics, will be passed on to our clients via a demurrage line item charge on invoices generated AFTER March 15, 2018. Since these demurrage charges are unable to be forecasted, TOC Logistics recognizes the need to increase our attention to each client’s container reality and make every effort to provide advance warnings of additional charges; but we must state that this will not be a perfect solution or outcome and we will make appropriate notices as we are made aware.
The supply chain conditions today are not just challenging, but truly critical, and surviving this will be very expensive for ALL of us. Please endeavor to stay closely engaged with your TOC Account Manager and/or Operations Representative to collaborate together on maintaining as smooth a supply chain as humanly possible.