Shippers being forced to pay fees even though they are unable to pick-up cargo.
Federal Maritime Commissioner William P. Doyle highlighted the problem of shippers who are charged demurrage when they are unable to pick-up cargo at terminals through no fault of their own during a speech about port congestion at the 14th Annual Port New York/New Jersey Port Industry Day.
“I would be remiss not to bring forward an issue on the periphery of port congestion, but extremely important nonetheless,” said Doyle. “Demurrage fees placed on shippers who are ready, willing and able to pick up their containers but, through no fault of their own, these shippers are precluded from getting their boxes — and as a result, they have to pay a fine for the storage days in the terminal. Please think about this problem — it is surfacing more and more.”
Several speakers — including Jonathan Gold, vice president, supply chain and customs policy at the National Retail Federation — spoke about demurrage charges at a recent forum on port congestion held by the Federal Maritime Commission in Baltimore.
Doyle continued, “It seems to have gotten much worse because of the congestion issues. Retailers are definitely talking with their carriers and the terminals
about demurrage and congestion overall. It depends on the shipper how
the charges are addressed. It’s one of the major issues that needs to
be addressed as everyone looks to resolve the congestion issues.”
Bruce Carlton, the president and chief executive officer of the National Industrial Transportation League, said his members are also commenting on demurrage.
“It’s sort of a ‘double
jeopardy’ situation — they can’t get boxes out of the yard due to
congestion, chassis supply problems, whatever. And then they have to
pay a demurrage penalty because they can’t get the boxes out of the
yard. It’s probably not the number one problem, but it’s there, and I
think it’s more than ‘on the periphery.'”
He continued, “A related problem is boxes that are pulled out for deeper
inquiry/inspection by CBP. They are undermanned, and boxes end up
sitting waiting to be cleared — pretty soon free time is expired and
bang, it’s demurrage time again.”
Doyle praised a “thoughtful and well-reasoned report” created by a Port Performance Task Force in New York/New Jersey earlier this year.
“You came up with 23 recommendations, and some of those recommendations must have been very difficult for everyone to come to accept. By doing so though, it demonstrates how deeply you care about finding solutions,” he said.
“But, as I have just hinted, that was the easy part — formulating recommendations. Now, you are moving to the next phase — implementation,” he continued. “I urge you to implement the recommendations and finish the work — together.
Doyle said port congestion is a worldwide problem and mentioned larger ships, an improved economy and weather as contributing congestion factors.
“The good news is that infrastructure and port-related projects garner bipartisan support. The Obama Administration strongly supports the development of our ports through TIGER grants and expedited regulatory reviews. Further, Congress recently passed the Water Resources Reform and Development Act of 2014, the first water resources bill signed into law in 7 years,” he said.
Doyle noted that the U.S. Department of Transportation announced a $14.8 million construction grant for the Port Newark Container Terminal Access Improvement and Expansion Project.
