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FMC Begins Formal Investigation on Unfair Port Charges

Wednesday, March 07, 2018
Sandler, Travis & Rosenberg Trade Report

The Federal Maritime Commission has launched a fact-finding investigation on the practices of vessel operating common carriers and marine terminal operators related to detention, demurrage, and per diem charges. The investigation stems from a December 2016 petition from the Coalition for Fair Port Practices requesting that the FMC clarify through a rulemaking process what constitutes “just and reasonable rules and practices” with respect to the assessment of demurrage, detention, and per diem chargers by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.

The investigation will examine detention, demurrage, and per diem practices generally, although the following issues will be evaluated at a minimum.

- whether the alignment of commercial, contractual, and cargo interests enhances or aggravates the ability of cargo to move efficiently through U.S. ports

- when has the carrier or MTO tendered cargo to the shipper and consignee

- billing practices for invoicing demurrage or detention

- practices with respect to delays caused by various outside or intervening events

- practices for resolution of demurrage and detention disputes between carriers and shippers

As the designated investigative officer Commissioner Rebecca Dyer will have broad authority to conduct this probe, including the power to issue subpoenas, hold public and non-public sessions, and require reports. She is charged with making recommendations for FMC action, including investigations of prohibited acts, enforcement priorities, policies, rulemaking proceedings, or other actions warranted by the record developed in the proceeding. A final report with Commissioner Dye’s findings and recommendations is due to the FMC by Dec. 2.

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