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Coalition Seeks New Rules Against Unfair Port Charges

Monday, December 12, 2016
Sandler, Travis & Rosenberg Trade Report

A coalition of 25 importers, exporters, freight forwarders, customs brokers, and third-party logistics providers submitted to the Federal Maritime Commission Dec. 7 a petition seeking new rules preventing 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. The petition suggests that “cash-strapped ocean common carriers” may see these charges as a way to generate needed revenues.

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 coalition is protesting the assessment of demurrage during events that are outside the control of shippers, consignees, and drayage providers but prevent them from retrieving their cargo or returning equipment. In recent years such events have included port congestion due to the use of larger vessels, the 2014-2015 labor slowdown at U.S. West Coast ports, the bankruptcy of ocean carrier Hanjin Shipping, and inclement weather such as Hurricane Sandy.

The petition is therefore requesting that the FMC use its existing statutory authority to adopt a policy that would require marine terminal operators 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. However, 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.

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