The U.S. Federal Maritime Commission is preparing to hold public hearings related to a petition filed by the Coalition for Fair Port Practices about when it’s reasonable for ocean carriers and marine terminals to impose demurrage.
The U.S. Federal Maritime Commission on Wednesday voted to hold public hearings at its Washington headquarters related to a petition filed by the Coalition for Fair Port Practices about when it’s reasonable for ocean carriers and marine terminals to impose demurrage and detention fees on shippers’ containers.
“The stated purpose of the public hearings is to provide the commissioners an opportunity to question and discuss with the representative stakeholders the multiple causes of port congestion, the divergent array of demurrage, detention and per diem assessment practices by different MTOs (marine terminal operators) and VOCCs (vessel-operating common carriers) all in relation to the Petition 4-16 request for a new commission issued rule that would prescribe allowable business practices in the assessment of such charges,” the commission said in a statement.
While dates still need to be set for the hearings, the FMC plans to invite witnesses covering a spectrum of the container shipping industry, including the petitioner’s legal representatives, trade and shipper associations, importers and exporters, customs brokers and freight forwarders, logistics companies, trucking and drayage companies, container carriers, and port authorities and marine terminal operators.
In December 2016, the Coalition for Fair Port Practices filed a petition with the FMC which described a practice by carriers and terminals of applying unfair demurrage and detention charges against shippers when, through no fault of their own, cannot retrieve their containers prior to the “free time” expiration. This has occurred during times of port congestion, labor slowdowns due to contentious dockworker contract negotiations, infrastructure meltdowns, and inclement weather.
The Coalition for Fair Port Practices, a group comprising more than 20 trade associations, has proposed that the FMC issue clear guidance on when an ocean carrier or marine terminal can or cannot justifiably apply demurrage and detention on a shipper’s container.
The coalition’s members applauded the FMC’s announcement to hold public hearings related to the petition.
“We are delighted to see the FMC’s consideration of the petition brought forth by the Coalition for Fair Port Practices, and are especially pleased to see that the agency will hold hearings to hear directly from affected stakeholders,” said Jennifer Hedrick, executive director for the National Industrial Transportation League and a coalition member. “We look forward to working with the FMC and others to pursue workable resolutions to issues that have created penalties for beneficial cargo owners due to delays and disruptions outside of their control.”
“We continue to believe this is an important issue and well within the jurisdiction and authority of the commission to address,” Jon Gold, vice president of supply chain and customs policy for the National Retail Federation and a coalition member, told American Shipper.
“Based upon the FMC’s own report on detention and demurrage, we are seeking guidance and clarification, not a rulemaking, for the industry which will help to alleviate the ongoing issues that shippers and transportation providers continue to face,” he added. “Detention and demurrage are effective tools to ensure cargo and equipment move through the system. However, shippers and transportation providers should not be penalized for issues that are beyond their control that prevents them from picking up or dropping off containers and equipment.”
The FMC said it will publish details of hearing schedule and invited panel participants as soon as it finalizes the arrangements.
FMC to hold public hearings on detention and demurrage petition
