Background

Cargo Container Storage and Use Fees

The Federal Maritime Commission has finalized a regulatory change designed to resolve longstanding shipper and trucker complaints about the demurrage and detention practices for imports and exports of containerized cargo that are employed by ocean carriers and marine terminal operators.

Demurrage is charged for cargo containers exceeding allotted free time at a terminal, while detention fees are assessed for use of carrier-provided containers beyond the allotted free time. In December 2016 the FMC received a petition arguing that free time periods had been reduced and demurrage and detention charges had increased considerably and that shipping lines had abused such charges to increase income and profits. In a December 2018 final report the FMC determined that while demurrage and detention are valuable charges when applied in ways that incentivize the prompt movement of cargo from ports and marine terminals, the concerns raised in the petition were valid and there are improvements that could be made.

In response, the FMC has issued a final interpretive rule setting forth a non-exclusive list of considerations it will use in assessing whether a detention or demurrage practice is unjust or unreasonable. These include the extent to which demurrage and/or detention fees are (1) serving their intended primary purpose of incentivizing cargo movement and promoting freight fluidity, (2) related to cargo availability for retrieval, (3) imposed when a container cannot be returned, and (4) imposed in the context of government inspections. Other considerations include (1) the existence, accessibility, content, and clarity of policies implementing demurrage and detention practices and regulations and (2) the extent to which regulated entities have clearly defined the terms used in their demurrage and detention practices and regulations.

The FMC states that the final rule adds two provisions that were not included in the proposed rule to clarify that (1) the guidance in the rule is applicable in the context of government inspections and (2) the rule does not preclude the FMC from considering additional factors, arguments, and evidence outside those specifically listed.

OTI License Revocations and Applications

The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been revoked. A revocation may occur after a license is surrendered voluntarily by the OTI or for failure to maintain a valid bond.

- license #027985NF: A Ocean Cargo, San Gabriel, CA

- license #025267N: Aduamerica USA Corp., Miami, FL

- license #026392NF: AIT International of America Inc., Torrance, CA

- license #026681N: All Satisfied Logistics Inc., Gardena, CA

- license #026195F: Cargo Out Logistics Inc., Baltimore, MD

- license #027663N: Global Ocean and Air Logistics Solutions LLC, Cumming, GA

- license #023011NF: Hansol Goldpoint LLC, Elizabeth, NJ

- license #019662NF: Hemisphere Cargo Corp., Miami, FL

- license #018965NF: Kingscote Freight Inc., Inwood, NY

- license #016383N: Logictrans Corporation, St. Louis, MO

- license #027478F: Mohammed H. Issah dba H&H Asset Repurposing, Iowa City, IA

- license #025080N: NRL Logistics for International Shipping & Transport Services, Cairo, Egypt

- license #025170F: Premium Logistics North America LLC, Baltimore, MD

- license #016185F: Rost International Inc., Coral Springs, FL

- license #020932NF: Samrat Container Lines Inc., Piscataway, NJ

- license #022926N: Sea Cargo Inc., Long Beach, CA

- license #017105F: Supplies & Global Logistics Inc., Houston TX

- license #002056NF: XPO GF America Inc., Rancho Dominguez, CA

In addition, the FMC has provided notice that the following have filed applications (a) for OTI licenses as NVOCCs and/or ocean freight forwarders or (b) to amend an existing OTI license or the qualifying individual for a licensee.

- Afro-American Trading Group Inc dba AAT Group Auto Sales, Highspire, PA (new OFF license)

- Caribbean Procurement Inc., Fort Lauderdale, FL (new NVO and OFF license)

- East West Gate Logistics LLC, Leesburg, VA (new NVO license)

- Gloria Odile Edwards dba ODY Global Limited, Houston, TX (new NVO and OFF license)

- H. W. Robinson & Co. Inc., Valley Stream, NY (QI change)

- Mobony Impex LLC, Arlington, TX (new NVO license)

- Nippon Express U.S.A. Inc., Long Island City, NY (QI change)

- Ralex International Corp., Doral, FL (QI change)

- ShipTech LLC, Chicago, IL (new NVO and OFF license)

- Terra Worldwide Logistics LLC, Miami Lakes, FL (adding trade name American Global Logistics)

- Topp Cargo & Logistics LLC, Medley, FL (QI change)

- Vintage Logistics Inc., Laredo, TX (new NVO license)

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