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FMC to Hold Hearing on Unfair Port Charges

Tuesday, November 21, 2017
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission will hold public hearings Jan. 16 and 17 in Washington, D.C. to receive input on a petition seeking a FMC rule or policy preventing marine terminal operators and ocean carriers from charging unfair demurrage and detention fees when uncontrollable incidents such as storms and strikes keep cargo from being picked up from ports on time. Requests to speak at the hearing are due by Dec. 8.

Cargo owners and trucking companies are normally given a certain number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that period they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the containers and the chassis used to haul them are not returned within a specified time.

The petition is requesting that the FMC use its existing statutory authority to adopt a policy that would require MTOs and ocean carriers to extend free days during times of port congestion, weather-related events, port disruptions, delays caused by government actions, or other requirements beyond the control of the parties picking up or returning containers. In addition, the petition asks the FMC to declare demurrage and similar fees charged by carriers and MTOs during such incidents to be unreasonable under the Shipping Act. The petition would allow for compensatory fees to be charged in some cases as long as they do not exceed actual storage or equipment use costs.

The FMC states that it has received 115 responses to the petition from members of Congress, trade and shipper associations representing various interests, individual importers, exporters, customs brokers, freight forwarders, logistics companies, trucking and drayage companies, vessel-operating common carriers, port authorities, and marine terminal operators. Given the importance of this issue, its complexity, and the public interest indicated by the number and quality of comments submitted, the upcoming hearings are designed to further explore the issues raised by the petition and address specific questions. Commentary and answers to these questions will be taken into consideration as the FMC determines its next steps with regard to this petition.

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