Sen. Thune urges action on ‘inequitable’ demurrage, detention fees

In his Sept. 5 letter, Sen. Thune, R-S.D., cited a petition filed in December 2016 by the Coalition for Fair Port Practices regarding what it said has been inequitable assessment of detention and demurrage charges by marine terminal across the U.S.

   U.S. Sen. John Thune, chairman of the Senate Committee on Commerce, Science and Transportation, has written to the head of the Federal Maritime Commission (FMC) expressing concern with inaction in addressing what some say is a blatant inequity by some ocean carriers regarding collection of demurrage and detention fees.
   In his Sept. 5 letter, Thune cited a petition filed in December 2016 by the Coalition for Fair Port Practices regarding what it said has been inequitable assessment of detention and demurrage charges by marine terminal across the United States and a call for “just and reasonable” regulations and practices.
   “It is my understanding that the Commission is still formulating its plans for further action,” Thune (R-SD) wrote in the letter, which was addressed to FMC Acting Chair Michael Khouri. “It is important that the Commission prioritize this issue and determine whether any further action is needed to foster a fair, efficient and reliable ocean transportation system.”
   The demurrage and detention fees issue revolves primarily around how during periods of port congestion, exporters and importers are often unable to enter terminals to deliver or remove containers prior to expiration of “free time,” and then through no fault of their own find themselves subject to terminals’ container storage fees.
   Examples of situations of when importers and exporters should not face penalties, the coalition says, are congestion taking place during labor negotiations, the introduction of mega-ships overwhelming terminal capacity, lack of terminal and roadway infrastructure, or inclement weather.
   The Coalition for Fair Port Practices, a group of 25 trade associations representing importers, exporters, drayage providers, freight forwarders, customs brokers and third-party logistics providers, said it is petitioning the FMC to initiate a rulemaking proceeding that would clarify what constitutes “just and reasonable” assessment of demurrage, detention, and per diem charges. The coalition includes the American Apparel & Footwear Association; American Chemistry Council; Association of Bi-State Motor Carriers; Association of Food Industries; Auto Care Association; Foreign Trade Association; Green Coffee Association; Harbor Association of Industry & Commerce; Harbor Trucking Association; Intermodal Motor Carriers Conference of the American Trucking Associations; International Association of Movers; Juice Products Association; Juvenile Products Manufacturers Association; Meat Import Council of America; Motor & Equipment Manufacturers Association; National Customs Brokers & Forwarders Association of America; National Pork Producers Council; National Retail Federation; New York/New Jersey Foreign Freight Forwarders and Brokers Association; North American Meat Institute; Retail Industry Leaders Association; Tea Association of the USA; National Industrial Transportation League; Transportation Intermediaries Association; and U.S. Hide, Skin and Leather Association.
   Specifically, the coalition has proposed that the FMC approve a rule stating that, among other things, if an ocean common carrier or marine terminal operator is somehow temporarily disabled before the expiration of a shipper or receiver’s free storage time, it would be unreasonable to charge demurrage, detention, or per diem for the period of the ocean common carrier’s or marine terminal operator’s disability.
   The Agriculture Transportation Coalition (AgTC), which is supportive of the Coalition for Fair Port Practices’ cause though not an actual member of the coalition, also expressed support for Thune and his letter the day it was sent.
   “The AgTC hopes that the FMC will take heed of Chairman John Thune’s clear message, and initiate action as proposed in the petition,” the group said in a statement provided to American Shipper. “Such action could address the millions of dollars of unfair charges imposed on exporters, importers and their truckers by some ocean carriers, and could prevent continuing abuse by these ocean carriers.”