Facts about manipulation fee
- Q: Does Baltic Hub charge for infrastructure access?
A: No. Baltic Hub does not charge and has never charged such a fee.
- Q: When was the tariff item called “manipulation fee” introduced?
A: In 2008.
- Q: Can the ‘manipulation fee’ be considered as an infrastructure access fee?
A: No, it is charged for services provided by Baltic Hub.
- Q: Are these types of fees known in Poland and worldwide?
A: Yes, these types of fees were and are collected in Polish Ports and other ports around Europe. It is a complex subject because, in different countries the charges for these services are located differently (For example, In Germany in the tariff of railway carriers they are bundled within the charges of the so-called port railway for entering data on wagons and containers into the system, or in the case of Italy, it is charged directly to the train operator in the terminal tariff just the same as at Baltic Hub). In some locations they may also be somewhere in the so called “liner THC” that applies to rail moves, but the “liner THC” may contain many components which are contracted directly between the terminal and the operator.
- Q: How did Baltic Hub customers approach this fee?
A: It is important to say that all our customers have treated it as a fee for just like any other, for services provided by the terminal and in some cases have exercised their right to negotiate its amount and terms of payment.
- Q: What activities are included in the “manipulation fee”?
A: It is a whole range of activities that are listed in the terminal’s Standard Tariff: “The manipulation fee for rail services includes, but is not limited to: preparation of the rail wagons to facilitate handling of the containers including adjustment of pins or clearing of rail wagons; physical verification of compliance of the loading plan as received from the Principal compared to actual situation including verification of any Customs (or other) holds; preparation of a report on related discrepancies and providing solutions thereof; rail window pro-forma management including the daily planning of rail services; preparation and updating of the terminal operating system based on pre-advised information received from the Principal”.
- Q: Are such services covered by the THC paid by the shipping lines?
- Q: Who is the party ordering the services covered by the THC?
A: That is the Shipping Line.
- Q: Then who pays for the loading onto the rail wagon?
A: That is the Shipping Line.
- Q: If this is the case, why does the intermodal operator pay for some additional services in the form of a “manipulation fee”?
A: Because in Baltic Hub’s tariff the Shipping Line pays up to the next mode of transport and we provide the same service whether than next mode of transport is by road or by rail. However, for rail transport, there are additional services required, which are not required for road transport. These are listed in Question 6 above and are charged to the party ordering the service, which is the party that provides information on where and how this loading is to be carried out.
- Q: And if the shipping line provides such information itself?
A: Then it is the shipping line who will pay for it. In our terminal there are trains run by shipping lines and they pay for such services.
- Q: Intermodal operators argue that Baltic Hub undertakes these services for its own convenience, that the intermodal operators do not need them.
A: Baltic Hub does not perform any paid activities for its own convenience. For example, if a truck driver sets his twistlocks on the trailer so that the container can be loaded onto the truck, it is clear he is doing this for his convenience not Baltic Hubs. In the case of the services provided by Baltic Hub for the rail operators, they cannot be undertaken by the rail operator themselves, but these services are necessary for the handling of a train and are for the train operators’ convenience. If they increase the efficiency of the terminal by the way, then it is for mutual benefit. For example, the pin setting by an employee of Baltic Hub makes it unnecessary for the train to enter the terminal twice and the verification of the loading plan minimizes the risk of the container remaining on the wagon or the train leaving the terminal empty.
- Q: Why is road transport not subject to such a fee?
A: Simply because the services are either not required for the loading of a truck or are carried out by the road haulier or driver himself. No Baltic Hub employee prepares the semi-trailer for loading, sets up the lashing devices, does not dismantle the semi-trailer, etc. We also try to digitize processes (e.g. setting the time of entering the terminal).
- Q: Why don’t you then digitize the processes in the case of the rail service?
A: We are in dialogue with suppliers of such solutions and with intermodal operators in order to be able to offer such facilities to intermodal operators as well. Everyone who operates in the rail freight market knows that these are very complex issues and require the construction of certain standards from scratch.
- Q: Can it be said that Baltic Hub discriminates against rail transport in relation to other modes of transport?
A: No. Baltic Hub believes that all modes of transport have their proper place. We are a strong promotor of greater transport efficiency to the benefit of the Polish economy and infrastructure investment. In this regard the benefits of intermodal transport and rail transport as one of our direct links are clear. 35% of the gateway traffic in our terminal is rail and this is the largest proportion of all Polish terminals. The investments we make in rail transport are also proof of our continued support for the rail transport market. We are in regular dialogue with road carriers as well and in some cases we have been accused of the opposite – of promoting railways vs road transport.
- Q: Why did some of Baltic Hub’s customers stop paying their invoices for the handling fee at the beginning of 2019?
A: It is difficult for us to address this as these companies had been paying the fee for 10 years. Despite an open dialogue approach from Baltic Hub, we were forced to exercise our right of redress in June 2019. There can be no consent to breach of contract.
- Q: What was the verdict of the court in this case?
A: In March 2020, the court granted Baltic Hub’s position and ordered the defendant company at first instance to pay the entire arrears with interest.
- Q: How did Baltic Hub behave towards the companies with which it is in legal dispute over the handling fee?
A: Theoretically, if a company stops paying for the services we provide, there would be a strong rationale for Baltic Hub to cease cooperation with that company. However, Baltic Hub has always tried to act in a consistent and professional manner and we have been mindful to ensure that any dispute with a rail operator did not negatively impact the receivers or shippers of cargo. We realize we are all part of the logistics supply chain and we want to help grow Poland’s industry. There is a right to appeal the first court ruling and Baltic Hub respects the rule of law and due process. However we note that some of the other parties have hired external PR agencies to try to put pressure on Baltic Hub and have resorted to writing factually inaccurate comments in letters to the industry and in press articles.
- Q: Can we read the verdict of the court?
A: Certainly, please find a summary of the sentence here
- The construction of the manipulation fee, including the fact it is charged from intermodal operators, corresponds to market economy mechanisms. It is an equivalent to the services actually provided to the defendant (GP: PCC), and the amount of the fee in the Court’s opinion is economically justified and not overstated.
- The parties were bound by an agreement under which the defendant (GP: PCC) undertook to pay the fees listed and specified in the Standard Tariff or in written agreements for the activities rendered by the plaintiff (GP: DCT). One such service for which a fee (manipulation fee) was provided was rail service. Due to the fact that such activities were undeniably carried out and the recipient of those was the defendant (as evidenced by the evidence gathered in the case), the plaintiff was entitled to appropriate remuneration, which was calculated in accordance with the rate adopted in the Tariff applicable from 2019.
- In the Court’s assessment, therefore, there is no obstacle for the plaintiff (GP: DCT) as a container terminal to charge the defendant (GP: PCC) with amounts due for actual services rendered on a railway siding in accordance with free market economy principles, since as the plaintiff (GP: DCT), as it has been shown, actually performs such activities and bears costs and expenses. The above observations of the Court could not be changed by the amendment to the act on rail transport, which also included the concept of railway infrastructure as a railway siding, because the evidence proceedings carried out in the case did not confirm that the plaintiff (GP: DCT) charged a manipulation fee solely for the use of the railway siding, i.e. the mere fact of entry a train to this siding.
- In the present case, by sending the container loading list and then placing it on the railway siding and the fact that the train was notified earlier, the defendant (GP: PCC) each time ordered that the plaintiff (GP: DCT) would provide the necessary services at the railway siding. This is evidenced by the practice of entrusting additional transshipment operations developed over 10 years, which has remained unchanged since the conclusion of the framework cooperation agreement in 2008 and was also applied to other intermodal transport organizers. It is obvious that if the defendant (GP: PCC) sent the plaintiff (GP: DCT) shipment reports (understood as instructions containing data necessary to perform the shipment service), he also ordered all additional activities necessary to perform such transport. In the opinion of the Court, by the mere fact of placing wagons for loading and unloading on the plaintiff’s railway siding as well as signing a framework cooperation agreement, which in unregulated matters referred to the standard tariff and DCT regulations, the defendant implicitly agreed (and ordered) activities in rail service. Charging the defendant with the above costs was justified because it was the defendant, as the intermodal transport organizer, who decided on the means of transport. Therefore, if he chose rail transport, he should take into account such additional expenses and incur them.