Appropriateness of detention and demurrage charges must be addressed on a case-by-case basis, says World Shipping Council.
The World Shipping Council, the primary trade association for the liner shipping industry, is asking the Federal Maritime Commission not to make a “generalized judgment” about costs related to port congestion such as detention and demurrage.
A letter sent Thursday by Chris Koch, chief executive officer of the WSC, to FMC Chairman Mario Cordero argues that when it comes to port congestion, “There are no simple, generic answers or appropriate scapegoats. There are no good guys and bad guys. There is no regulatory action that will address the combination of causes of port congestion or that can equitably resolve or simplify the various complex market forces trying to deal with the unavoidable issue of cost recovery.”
Koch notes that some comments submitted to the FMC “make a sweeping claim that the practice of adhering to established free time limits and assessing detention and demurrage during times of serious port congestion is ‘unfair and unproductive,’ and that the Commission should consider taking some unspecified generalized action using some unspecified authority under the Shipping Act against detention and demurrage charges.”
Koch made it clear in his letter that liner companies are also frustrated and are working with ports, terminals, and other parties to reduce congestion.
He argues, “The question of whether a charge for detention or demurrage may be in violation of the Shipping Act is by its very nature a fact-specific inquiry to be addressed on a case-by-case basis.
“Trying to assign responsibility for who caused what level of port congestion would be a difficult, complex, and unsatisfying undertaking,” adds Koch. “Making a generalized judgment about what mechanism by what party would be appropriate to recover congestion costs or help manage port terminal efficiency would be an inescapable quagmire.”
Koch called efforts by the FMC’s Office of Consumer Affairs and Dispute Resolution Services (CADRS) to address specific complaints “appropriate and constructive.”
He noted that in a court case, the complaining party seeking relief from detention or demurrage charges “is responsible for presenting evidence to support its allegation of Shipping Act violations,” but also recognized “there may be situations that would justify such actions.”
