The Federal Maritime Commission announced this week that it is initiating an investigation into the demurrage and detention practices of some ocean carrier lines and marine terminal operators, especially in cases where shippers are not allowed to retrieve cargo.
The investigation, led by Commissioner Rebecca Dye, stems from a petition filed in December 2016 by the Coalition for Fair Port Practices, of which NITL is a member. The petition (Petition P4-16) asked the FMC to initiate a rulemaking proceeding to restrict the ability of steamship lines and marine terminal operators to impose detention and demurrage charges due to circumstances beyond shippers’ control.
Demurrage is assessed on cargo left at a terminal beyond allotted free time. Detention charges are levied for late return of carriers’ containers. The fees are designed to discourage the use of terminals for long-term storage and to improve equipment utilization.
In January, Don Pisano, a member of the NITL Board of Directors and former chair of NITL’s Ocean Transportation Committee, and Karyn Booth and Nick DiMichael, League counsel, joined other representatives from the Coalition for Fair Port Practices in testifying before the FMC on unfair demurrage and detention charges. The coalition representatives noted that unfair port charges have been levied more frequently in recent years as a result of labor strife, increasing freight volumes, the Hanjin bankruptcy, and weather emergencies.
In launching the investigation, Commissioner Dye ordered ocean common carriers and marine terminal operators to provide information and documents explaining their detention and demurrage practices. She also urged shippers, dray truck companies, and other affected parties that can document specific allegations and provide supporting materials of unreasonable port detention and demurrage practices and fees to step forward and cooperate with the investigation.
“We expect concerned parties to participate robustly in this investigation,” she said. “Their cooperation is essential.”
Correspondence, allegations, and supporting documents can be sent to the FMC by e-mail at FF28@FMC.Gov. The physical mailing address is as follows:
Commissioner Rebecca Dye
Federal Maritime Commission
800 North Capitol Street, N.W.
Washington, DC 20573