In a letter from a group of port users and the ports of Long Beach and Los Angeles – NITL has joined in requesting expedited consideration of the West Coast Marine Terminals’ filing for the extension of the temporary adjustment to the Traffic Mitigation Fee (TMF).

You can find the full letter here : 2022-01-27 — Letter to FMC — Extension of Temporary Adjustment

The National Industrial Transportation League (NITL) has a legacy of advocacy for US shippers and works tirelessly to earn the label “The Shippers’ Voice Since 1907.” Our organization collectively and our members individually continue to contribute experience and expertise to the development of solutions that are so desperately needed to address the congestion problems in our ocean freight delivery system.

It is important to recognize, however, that the League’s May 2021 proposal that became part of HR 4996, the Ocean Shipping Reform Act of 2021 (OSRA21), was not designed to solve port bottlenecks. We have seen OSRA21 denigrated because it does not solve the critical congestion problems, but those criticisms are overlooking the very real but different concerns impacting US businesses that led to the League’s call for regulatory action to modernize the Shipping Act to address present-day challenges involving ocean carrier service and practices.

We have tremendous regard for the work being done by Federal Maritime Commission (FMC) Commissioner Rebecca Dye in her Fact Finding 29 and Commissioner Carl Bentzel in his data Initiative, as well as other public and private efforts under way throughout the industry to improve the ocean cargo delivery network. We have seen how bringing together the participants in the system can result in a fair and practical conclusion to what had been viewed as an overwhelming dilemma. The outcome of Fact Finding 28 that led to the FMC’s Interpretive Ruling on Demurrage & Detention was one such shining example. Unfortunately, it has also become the embodiment of how the agency’s articulation of likely unreasonable demurrage practices has not resulted in the performance of reasonable practices, as carriers continue to invoice millions of dollars in demurrage and detention under unreasonable circumstances when delays are beyond the control of the cargo.

For this reason, NITL supports the reforms outlined in OSRA21 that will require demurrage and detention charges to be consistent with their long-recognized purpose of incentivizing efficiencies in the ocean cargo delivery network. The FMC’s rule made clear that demurrage and detention may not be assessed when no efficiencies in cargo pickup or return of equipment will be achieved. OSRA 2021 simply requires codification of the FMC’s interpretation to improve carrier compliance and address ongoing unfair demurrage practices.

But OSRA21 is not just about demurrage and detention.

Since early 2021, League members have suffered the most extraordinary ocean freight rate increases in return for the most unreliable ocean carrier service on record. Ocean carriers are declining booking requests at unprecedented levels, leaving businesses scrambling to secure carriage for the products and materials needed to fill sales orders and meet production schedules. US supply chains have been put at risk with companies unable to anticipate when — if ever — their shipments will move. To make matters worse, many US businesses are often left no option but to obtain carriage on the spot market at rates that rise exponentially on a bi-weekly basis. In some instances, working outside of an agreed service contract with an ocean carrier has been necessary even though space commitments have not been satisfied in the contract. Although contract breaches are reserved for the courts, OSRA21 would require a common carrier to engage in “just and reasonable practices” with respect to service contracts.

US businesses harmed in current environment

US importers and exporters depend on timely access to equipment and vessel space to meet their production and delivery requirements, as well as customer and consumer demand. These critical ocean service needs have not been adequately satisfied and allocations have been inconsistent and unpredictable. Further, agricultural and other exporters have expressed concerns that ocean carriers are transporting increasing levels of empty containers back to Asia to maximize their profits in the eastbound trade, while denying them access to boxes and vessel space to meet their business demands in overseas markets.

In response, OSRA21 provides increased oversight of container and vessel space allocation to prevent unreasonable practices and stipulates that a common carrier may not “fail to furnish … containers or other facilities and instrumentalities needed to perform transportation services, including allocation of vessel space accommodations, in consideration of reasonably foreseeable import and export demands.” OSRA21 also specifies that a common carrier may not “unreasonably decline export cargo bookings if such cargo can be loaded safely and timely … and carried on a vessel scheduled for the immediate destination of such cargo.”

For the US importer who managed to secure carriage for their goods — even if at inflated spot rates — the service problems did not end. Schedule delays, voyage cancellations, and port bypasses resulted in delayed arrivals to port. And additional delays followed while containers booked to move inland by rail under the terms of the ocean bill of lading sat on the piers for weeks before moving toward their destinations.

OSRA21 would address these sort of service problems by requiring the FMC to initiate a rulemaking proceeding to include the “duty to perform the contract of carriage with reasonable dispatch” and a “requirement of ocean common carriers to establish contingency service plans to address and mitigate service disruptions and inefficiencies during periods of port congestion and other market disruptions.” Clarifying a “reasonable” standard for common carrier service and focusing on advance contingency planning would help to identify what minimum level of service is required meet the needs of the shipping public and to mitigate harms such as those caused by severe port congestion.

In the early part of 2021, concerns about unreasonable practices faced by importers and exporters continued to grow in number and breadth, leading to the recognition that the current Shipping Act, last updated over two decades ago, does not specifically address current day challenges and that the “reasonableness” that US businesses deserve from the ocean delivery system would not be reached voluntarily. These ongoing unprecedented challenges have left US businesses unable to rely on the essential ocean freight delivery system that is integral to their supply chains and, quite possibly, to their sustainability.

More than 20 years ago, the Ocean Shipping Reform Act of 1998 made regulatory changes that were appropriate for the time. In today’s environment where three alliances control more than 80 percent of the ocean capacity to and from the US and where global trade is the lifeblood to so many US businesses, the Ocean Shipping Reform Act of 2021 seeks to update the ground rules for reasonable practices for the protection of US businesses who depend on efficient and competitive ocean transportation. There is no doubt that one byproduct of having those guidelines in place will be the ability for US businesses to operate more efficiently. The enhanced predictability of cargo movement that would naturally result from more reasonable practices might just contribute to lessening some of the congestion problems as well.

Contact Lori Fellmer at [email protected].

NITL Applauds House Passage of the Ocean Shipping Reform Act of 2021 (HR 4996)

Washington, DC, December 8, 2021. The National Industrial Transportation League (NITL), the nation’s oldest trade association representing industrial freight transportation shippers, applauds the overwhelming support shown in passage of the Ocean Shipping Reform Act of 2021 (OSRA21) by the US house of Representatives. The final vote this evening was 364 voting yea and only 60 voting in opposition.

The League was instrumental in the efforts leading up to the 1998 amendments to the Shipping Act and looks forward to working with the Congress, the FMC, and all industry stakeholders to address the critical challenges faced by importers and exporters and others by updating this important federal law.

“The overwhelming, bi-partisan support shown for modernizing the Shipping Act of 1984 is an important step toward addressing systemic issues contributing to congestion at U.S. seaports and unprecedented disruption to the ocean shipping network” said Nancy O’Liddy, NITL’s Executive Director.  “The ongoing ocean shipping turmoil has wreaked havoc on US exporters and importers, costing them billions in higher shipping costs, demurrage and detention charges, and lost business.”

“The inability of US companies to timely access marine containers and chassis and secure sufficient vessel bookings to meet their business requirements has upended the ocean cargo shipping and delivery network. These unprecedented challenges exposed gaps in the law governing ocean carrier services that are addressed by OSRA21.  We are very grateful to Representatives Garamendi and Johnson (the bill’s original sponsors) and their staff’s for advancing this important legislation.” – NITL Ocean Transportation Committee Chair Lori Fellmer.

“OSRA21 addresses many of the problems faced by the shipping community and seeks to address gaps in the current law. While the League strongly commends the regulatory efforts in recent years initiated by the FMC, we believe the agency and shipping industry will benefit greatly from these reforms that are targeted to address the challenges of 2021,” said Fellmer.

NITL has been working with members of the US Senate on companion legislation and will now turn its full focus on encouraging them to take similar action, as soon as possible, to bring relief to US importers, exporters, and consumers affected by the broken ocean shipping supply chain.

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About NITL:

The National Industrial Transportation League (NITL) is a trade association whose mission is to advance the views of shippers on industrial freight transportation issues and advance their professional development. NITL membership is comprised of companies engaged in the rail, maritime, and highway industrial freight transportation sectors who are committed to the competitive, efficient, and safe movement of goods across the United States and beyond.

We, the undersigned coalition of associations representing agriculture, foodservice, trucking, warehousing, manufacturing, retail, construction, energy, and other key supply chain stakeholders, call on the Biden Administration to work with our industries to address the immense challenges impacting our nation’s supply chain.  While we represent different industries, we share the common burden of current supply chain disruptions, which are driving up prices and leading to a growing shortage of goods in the United States, with the holidays just around the corner.

On behalf of the National Industrial Transportation League (“NITL”), I am writing to you regarding significant concerns of our members regarding the new Container Excess Dwell fees recently adopted by the Ports of Los Angeles and Long Beach. These fees are intended to be assessed against ocean carriers, but some carriers intend to pass the fee through to their importer customers.  The fee is designed to address the unprecedented congestion at the ports and to incentivize the prompt removal of loaded containers within the designated time-period.

Considering the extraordinary activity that we have been experiencing in the Ports of Los Angeles and Long Beach over the past 16 months and given that projections that show no reduction in volumes on the horizon, your recommendation that PierPass revert to an incentivizing program is a sensible one.  Such a change can be expected to ease congestion during the peak hours, encourage off-peak use of the marine terminals by the trucking and shipping community, and bring the associated benefits not only to the cargo interests but also to the impacted local community.

DOT’s Notice requested information concerning important issues regarding the supply chain to assist the Department in preparing the report required by EO 14017. NITL strongly believes that the issues and recommendations identified in these comments filed on October 18, will further the administration’s policy of improving the freight transportation delivery network and the resiliency of U.S. company supply chains, thereby improving the economic activity that takes place in other sectors. Hence, NITL urges DOT to add the recommendations detailed in here to its supply chain report for the transportation industrial base.

The National Industrial Transportation League, as the voice of the shipper, is enthusiastic that the Surface Transportation Board is taking up the issue of first-mile/last-mile, aka local switching service of the freight rail industry.  We have long advocated that average train speed and terminal dwell, while important measures of railroads’ line haul service health, do not adequately measure the total supply chain impacts of freight rail service. 

Railroads’ operational touch points with customers occur at the industries and the docks.  Creating an industry standard for reporting on the first and final legs of rail movements will provide valuable insights to both the Board and rail customers regarding the impacts of rail transit on U.S. supply chains.  This greater visibility into the challenges shippers/receivers face during localized rail service will provide data that will help industries plan and drive higher reliability and accountability of the freight rail providers’ common carrier obligations.

Nancy O’Liddy
Executive Director
National Industrial Transportation League

WASHINGTON, September 13, 2021 – A coalition of 152 companies and trade associations representing U.S. importers, exporters, transportation providers and other supply chain stakeholders today submitted a letter of support to Congress endorsing the Ocean Shipping Reform Act of 2021.

The bipartisan legislation was introduced last month by Congressmen John Garamendi and Dusty Johnson and would update the Shipping Act to recognize the significant changes to the international maritime transportation system of the past two decades. U.S. companies, their workers and consumers rely on a global maritime transportation system to support their businesses and move goods through the supply chain. The proposed legislation is essential to bring critically needed system improvements that have been further highlighted during the global pandemic.

Statements from policymakers and business stakeholders:

Congressman Dusty Johnson (R-SD): “Foreign ocean carriers aren’t playing fair, and American producers are paying the price. It’s time for updated rules of the road. That’s what our bill does.”

Congressman John Garamendi (D-CA): “Foreign businesses’ access to the American market and its consumers is a privilege, not a right. California’s agricultural exporters and other businesses are willing to pay to ensure that American-made products reach key markets in the Asia-Pacific. In turn, companies looking to offload foreign-made products at West Coast ports must provide opportunities for American exports. Even during a global pandemic, trade must be mutually beneficial, and that is exactly what our bipartisan bill ensures.”

David French, Senior Vice President of Government Relations, NRF: “The supply chain ecosystem is instrumental to American retailers’ ability to deliver products across the country to customers each day. Now is the time for the Shipping Act to be modernized to address a 21^st century supply chain. We appreciate the efforts of Congressmen Garamendi and Johnson to address these complex challenges so many businesses currently face and encourage Congress to move fastidiously on this crucial legislation.”

Jennifer Hedrick, Executive Director, National Industrial Transportation League: “The National Industrial Transportation League is grateful to Congressmen Garamendi and Johnson for their recognition of the challenges that maritime exporters and importers are experiencing, and for their commitment to seeking practical and workable solutions to the myriad issues affecting the entire maritime shipping network. NITL provides its full endorsement of the Ocean Shipping Reform Act of 2021 and is pleased to see that it not only addresses current challenges, but also provides a framework for a more robust maritime supply chain for all stakeholders. NITL thanks Congressmen Garamendi and Johnson for their leadership in this area of significant importance to American businesses, consumers and the global economy.”

Peter Friedmann, Executive Director, Agriculture Transportation Coalition:

“Agriculture and forest products are our country’s largest ocean export. Yet, there is nothing we produce in ag/forest products that cannot be sourced elsewhere in the world. We are pleased that Congressmen Garamendi and Johnson and over 140 members of Congress recognize that unless U.S. agriculture exporters can deliver affordably and dependably, our foreign customers will shift to other global suppliers. The Agriculture Transportation Coalition and our members in all 50 states are committed to build broad House and Senate support for OSRA21, even as we seek and support Federal Maritime Commission intervention, and as we engage with ocean carriers, ports, terminals, labor and truckers to find and implement solutions.”

The coalition aims to continue building support for the bill and Congressional passage this year. The letter is accessible here.

About NITL:

The National Industrial Transportation League (NITL) is a trade association whose mission is to advance the views of shippers on industrial freight transportation issues and advance their professional development.  NITL membership is comprised of companies engaged in the rail, maritime, and highway industrial freight transportation sectors who are committed to the competitive, efficient, and safe movement of goods across the United States and beyond.