National Industrial Transportation League Executive Director Jennifer Hedrick issued the following statement today in response to the Surface Transportation Board’s release of a report on review processes and methodologies:

“The National Industrial Transportation League (NITL) welcomes the release of the report from the STB’s Rate Reform Task Force. We are pleased to see that the report offers recommendations for modifying the current rate review methodologies and processes, including decreasing the costs and complexities of bringing a rate case before the board.

Members of NITL thank the STB staff for their work on the report and Chairman Begeman for her commitment to rate reform. We look forward to analyzing the report and providing further comment upon review.”

The National Industrial Transportation League has joined with 19 other organizations in co-signing a letter to U.S. Transportation Secretary Elaine Chao urging the Transportation Department to include a recommendation to change the national twin trailer standard from 28 feet to 33 feet as part of any infrastructure policy proposals it submits to Congress.

The letter notes that freight traffic has grown exponentially in recent years and is expected to continue doing so—DOT, in fact, is forecasting a 45 percent increase in freight volume by 2045. This increase will further stretch already-thin freight capacity and workforce levels and result in more highway congestion, greater fuel consumption, and higher freight transportation costs.

“The case for a policy change is clear,” states the letter. “Twin 33-foot trailers would immediately improve the efficiency and safety of truck operations across the nation’s congested freight network and benefit taxpayers and travelers. A new national standard for twin 33-foot trailers will add instant capacity while reducing congestion and improving the safety and efficiency of the roadways.”

The letter was submitted by Americans for Modern Transportation, a coalition of freight shippers, carriers, and interest groups that advocates for laws and regulations to streamline the delivery of products and consumer goods. NITL is a coalition member.

The National Industrial Transportation League congratulates Louis Sola and Daniel Maffei on their confirmations to the Federal Maritime Commission, the principal U.S. agency responsible for regulating the international ocean transportation system for the benefit of U.S. exporters, importers, and consumers.

We welcome Commissioner Sola in his new role at the FMC and are pleased to see the return of Commissioner Maffei to the agency. Their confirmations will allow the commission to more broadly consider issues that affect our nation’s shippers, including efficient port operations and reasonable terminal/carrier cargo handling practices.

NITL members look forward to working with Commissioners Sola and Maffei and other members of the FMC to ensure that our nation’s ocean freight transportation system remains efficient and strong.

This week, NITL joined with more than 75 other associations in sponsoring an ad in Politico thanking the U.S. Senate for confirming Patrick Fuchs and Martin Oberman to long-vacant seats on the Surface Transportation Board.

The STB has been operating for more than a year with just two of its five seats filled, hampering the agency’s ability to address ongoing freight rail issues and advance overdue regulatory reforms. In April 2018, the Senate Commerce, Science and Transportation Committee approved the nomination of Fuchs, a senior staff member of the committee; four months later, the committee also approved Oberman, a former chairman of Chicago’s commuter rail system, Metra. The full Senate approved Fuchs and Oberman on January 2 by voice vote.

The ad thanking the Senate was prepared by 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.

NITL continues to play a leading role in addressing unfair detention and demurrage practices at U.S. ports, joining with several other trade associations in filing comments last week with the Federal Maritime Commission to assist the agency in its investigation into such practices.

The comments were filed by the Coalition for Fair Port Practices, a group of trade associations
(including NITL) that represent thousands of importers, exporters, drayage providers, freight forwarders, customs brokers, and third-party logistics providers. The coalition prepared the comments in response to an interim report released by the FMC on Sept. 4. That report, which was based on a six-month study conducted by FMC Commissioner Rebecca Dye, requested additional information about six priority areas, including (1) developing transparent, standardized language for demurrage and detention practices and (2) simplifying demurrage and detention billing and dispute resolution processes.

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.

The FMC’s investigation of detention and demurrage practices was sparked by a petition filed in December 2016 by the Coalition for Unfair Port Practices. The petition 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. In response to the petition, the FMC launched a fact-finding investigation in April 2018 led by Commissioner Dye.

Commissioner Dye is expected to release her final report in December. The following month, she will attend NITL’s 2019 Transportation Summit, where she is scheduled to discuss the report’s findings.

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.”

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.

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 [email protected]. The physical mailing address is as follows:
Commissioner Rebecca Dye
Federal Maritime Commission
800 North Capitol Street, N.W.
Washington, DC 20573

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.”