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NITL Files Comments on Port Cargo Fee Changes

The National Industrial Transportation League has filed comments with the Federal Maritime Commission (FMC) about proposed changes to the traffic mitigation fee assessed on containers moving through the Ports of Los Angeles and Long Beach during peak periods.

In 2005, marine terminal operators at the two ports created the OffPeak program to reduce truck traffic in and around the ports. The OffPeak program initiated night and weekend work shifts for cargo drop-off and pickup; to encourage use of these shifts, a traffic mitigation fee of $72.09/TEU is levied on cargo moving during peak hours, defined as 3:00 a.m.–6:00 p.m. weekdays and 8:00 a.m.–5:00 p.m. Saturdays.

On April 16, the two ports proposed to modify the OffPeak program by (1) replacing the current $72.09/TEU fee on peak-period cargo with a standard fee of $31.52/TEU for both peak and off-peak shifts and (2) using an appointment system to spread traffic across the two shifts. The FMC invited interested parties to submit comments on the proposed changes; in response, NITL encouraged its members to share their concerns, which the League outlined in its letter to the FMC.

“NITL generally does not oppose terminal truck appointment systems, which can help manage truck congestion at marine terminals,” the letter states. “However, our members have concerns regarding the propriety of the proposed container fee, which eliminates the incentive for importers to move their cargo during off-peak periods and, thus, may result in an increase in congestion during peak terminal operations—contrary to the very purpose of the original PierPass program.”

The letter also expresses concerns about how the container fee proceeds will be used and whether the appointment system will be able to accommodate the truck traffic.

“Our members are also concerned about the lack of transparency as to whether the revenue projected to be collected under the proposed container fee bears a direct relationship to the costs of the LA/Long Beach off-peak terminal operations, or if the new user fees will simply become a new operating revenue stream for the terminal operators,” the letter states. “Additionally, insufficient information is available to determine if the appointment systems will be adequate to meet the needs of the shipping public and create efficient cargo operations. Accordingly, the League asks the Commission to investigate these concerns and request additional information that will enable the Commission to determine if [these modifications] would be contrary to the Shipping Act.”

League Thanks Senate Panel for Acting on STB Nominees

The National Industrial Transportation League joined with other freight rail customers today in thanking the Senate Commerce, Science, and Transportation Committee for voting to approve the nominations of Patrick Fuchs and Michelle Schultz to fill open seats on the Surface Transportation Board.

In a letter to Sen. John Thune, the committee’s chairman, and Sen. Bill Nelson, the committee’s ranking member, the League applauded the committee for taking this important and long overdue action. Of the STB’s five seats, only two are currently filled, leaving the Board unable to address ongoing freight rail issues as well as larger matters such as improving access to competitive freight rail service.

“A fully staffed Surface Transportation Board is vital to the fair and efficient functioning of the U.S. freight rail system and the health of America’s economy,” stated NITL Executive Director Jennifer Hedrick. “The members of the National Industrial Transportation League thank the Senate Commerce, Science and Transportation Committee, and especially Chairman Thune and Ranking Member Nelson, for their timely approval of Patrick Fuchs and Michelle Schultz to serve on the STB, and we look forward to working with the Board to increase access to competitive freight rail service for all shippers.”

The letter was sent under the auspices of the Rail Customer Coalition, a group of associations representing manufacturing, farming, and other sectors of the economy. RCC members (including NITL) are major users of freight rail, accounting for more than half of the total volume of cargo shipped by rail and generating more than three quarters of the revenues collected by the railroads.

FMC Launches Investigation into Port Fee Practices

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

League Urges Port, Labor Leaders to Resume Bargaining

The National Industrial Transportation League is urging officials representing East and Gulf Coast ports and the International Longshoremen’s Association to return to the bargaining table and resume negotiating a new master contract covering the ports.

In a letter to Harold Daggett, president of the ILA, and David Adam, chairman and CEO of the U.S. Maritime Alliance, the League expressed its “deep concern” that the two parties had not yet agreed to resume talks, which broke down December 6 over a disagreement about automated terminals. The current master contract covering the ports will expire on September 30.

The letter, which was signed by NITL and more than 110 other transportation, retail, consumer, and trade organizations, notes that a contract extension would benefit all parties with a stake in port operations by providing them with the “certainty” they need to conduct business. But it also warns that failing to resume negotiations could prompt shippers and cargo owners to begin making plans to shift to West Coast ports, where the master contract will not expire until 2022.

“Supply chain disruptions arising out of previous contract negotiations are well documented,” the letter states. “Such disruptions can have enormous adverse economic impacts. For example, disruptions on the West Coast caused marked shifts in business operations that benefitted East and Gulf Coast ports. Much of that new business has stayed on the East and Gulf Coasts, but could just as easily shift back to West Coast gateways, where a long-term contract is in place.”

NITL Responds to President Trump’s Infrastructure Plan

National Industrial Transportation League Executive Director Jennifer Hedrick issued the following statement in response to President Trump’s proposed infrastructure plan:

“The National Industrial Transportation League (NITL) applauds the efforts by the White House to improve our nation’s infrastructure, which can’t come soon enough for businesses moving freight. A more efficient freight supply chain is a critical component of businesses working to grow the U.S. economy, and ensures that our nation remains competitive within the global economy.”

TIA and NITL Release Updated Broker-Shipper Model Contract

The National Industrial Transportation League and the Transportation Intermediaries Association have revised their model broker-shipper contract and are making it available exclusively to NITL and TIA members.

The two organizations began updating the model contract in 2017, forming a small working group consisting of members of both organizations. Many of the updates are designed to address new federal regulations affecting the movement of food products, specifically the U.S. Food and Drug Administration’s final rule on the sanitary transportation of human and animal food. The rule took effect on 6 April 2017 for “larger” third-party logistics professionals (more than 500 employees) and will apply to “small businesses” as of 6 April 2018.

“Our respective organizations sought to integrate existing laws, regulations and legal interpretations and not place undue stress onto the other party,” says Jeff Tucker, CEO of Tucker Company Worldwide and chairman of NITL’s Highway Committee. “We’re pleased to provide this benefit to our members and our industry.”

 

 

League Voices Join Chorus Seeking Relief from Unfair Port Charges

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 a broad range of organizations earlier this week to urge the Federal Maritime Commission to restrict the ability of steamship lines and marine terminal operators to impose detention and demurrage charges due to circumstances beyond shippers’ control.

At hearings at FMC headquarters in Washington, D.C., the affected organizations, known collectively as the Coalition for Fair Port Practices, 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.

Demurrage is assessed on cargo left at the 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 December 2016, the Coalition for Fair Port Practices filed a petition (Petition P4-16) with the FMC asking the agency to initiate a rulemaking proceeding on this matter. The FMC announced in November 2017 that it would hold hearings on the issue on January 16-17.

 

 

League Mourns Loss of Former NITL President

Former NITL President James Bartley passed away on Tuesday, December 19, 2017. NITL members and staff mourn his loss and recognize the many years of service Bartley provided to the League. His obituary may be found here.

NITL Seeks to Testify on Demurrage and Detention Charges

NITL and its fellow members of the Coalition for Fair Port Practices are petitioning the Federal Maritime Commission to be allowed to testify before the FMC on what constitutes “just and reasonable rules and practices” with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.

“The Coalition commends the Federal Maritime Commission for its decision to schedule public hearings on the Coalition’s Petition for Rulemaking concerning demurrage and detention practices of ocean carriers and marine terminals applied during periods of port congestion or other circumstances impacting the accessibility of our nation’s seaports,” the petition states. “The Coalition appreciates the opportunity to explain the concerns of importers, exporters, and drayage operators who are assessed demurrage and/or detention/per diem when cargo cannot be delivered or equipment cannot be returned due to port congestion or other circumstances that are beyond their control.”

The Coalition for Fair Port Practices filed a petition (Petition P4-16) with the FMC in December 2016 asking the agency to initiate a rulemaking proceeding on this matter. The FMC announced on November 16 that it would hold hearings on this issue on January 16-17.

NITL Seeks Fresh Focus on Rail Service Issues

NITL and its fellow members of the Rail Customer Coalition (RCC) are urging the Surface Transportation Board and key lawmakers to remain vigilant about service problems affecting CSX customers and not simply assume that the railroad is improving operations across the board.

In the five weeks since the STB held a “listening session” to hear directly from shippers about the problems they are experiencing with CSX, service has only worsened in some areas served by the railroad, according to letters sent by the RCC to the STB and key members of Congress.

“With CSX closing additional yards since the listening session, rail customers remain very concerned about the resiliency of the rail network to meet customer demand now and into the future,” stated the letter to STB members Ann Begeman and Deb Miller. “The RCC would like to request a meeting with each of you to provide an update on continuing and in some cases deteriorating CSX service conditions, and to discuss actions the Board could take that would fix the underlying problems.”