Background

In its effort to combat skyrocketing freight costs and damaging service delays, the Federal Maritime Commission should expand its authority to include charges on goods shipped by rail, an advisory committee is recommending.

The FMC’s National Shipper Advisory Committee said that many shippers, both importers and exporters, tender cargo to ocean carriers from inland points against rates inclusive of rail and/or motor carriage that are quoted by the ocean carriers and subsequently filed with the FMC. The commission has oversight over ocean transportation, related parties, and related terms and conditions per the Shipping Act of 1984, the committee noted, and has also assumed oversight of demurrage and detention at marine terminals. If the FMC thus has oversight of the parties to the bill of lading, the committee said, it should also have oversight over the entirety of the terms and conditions to the bill of lading.

In the absence of such oversight, the committee said, there is currently no adequate dispute resolution process available to shippers when disputes arise involving the rail portion of cargo movement, including demurrage/rail storage and detention/per diem assessed at rail ramps by rail operators, terminal operators, and/or ocean carriers against through bills of lading.

The committee is therefore recommending that the FMC be given oversight over all carriers, subcontractors, rates, demurrage, detention, storage under any other name, terms and conditions, and modes reflected on any bill of lading issued by an ocean carrier. The committee said this recommendation would expand the FMC’s oversight to include (1) all rail carriage, (2) demurrage (including any charges labeled “rail storage”) and detention (including any charges labeled “per diem”) at rail ramps, and (3) commercial terms and conditions as they apply to shippers and carriers (ocean, rail, and motor) for all shipments with an ocean bill of lading, including rail transportation until the final destination defined within the bill of lading. This would be the case for both import and export shipments.
The committee is also recommending that (1) the FMC begin mandating the provision of accurate transit, cargo location, and container pickup/return locations by carriers to shippers and their nominated forwarders and/or brokers and (2) in the event of a conflict between the terms of the uniform intermodal interchange access agreement and the FMC’s oversight and rules, the FMC’s terms should prevail.

ST&R offers a wide range of FMC-related services, including help addressing unreasonable shipping charges. For more information, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email.)

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