A key Senate committee is asking the Federal Maritime Commission to give high priority to an NITL-backed effort to clarify when and why ocean freight lines and terminal operators can assess demurrage, detention, and per diem charges when ports are congested or otherwise inaccessible.
In December 2016, the League and 25 other trade associations—known collectively as the Coalition for Fair Port Practices—filed a petition with the FMC asking the agency to initiate a rulemaking proceeding “to clarify 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.”
Yesterday, John Thune, chairman of the Senate Commerce, Science, and Transportation Committee, sent a letter to acting FMC Chairman Michael Khouri urging the commission to “prioritize” this issue and take actions as warranted.
“Agricultural producers, manufacturers, retailers, and transportation service providers have questioned the fairness of detention and demurrage charges in situations involving port congestion and other circumstances,” Thune wrote. “They assert that such charges have implications for one of the Commission’s critical responsibilities—to ensure a common carrier or marine terminal operator does not fail to establish, observe, and enforce just and reasonable regulations and practices when receiving, handling, storing, or delivering property.”
On August 31, NITL filed comments with the U.S. Surface Transportation Board urging the STB to resume its “normal process” for completing rulemaking proceedings. The comments were submitted in response to a petition filed by the Western Coal Traffic League asking the STB to terminate its regulatory freeze and move forward on four pending proceedings.
NITL Executive Director Jennifer Hedrick participated in a “listening session” with the Surface Transportation Board’s Regulatory Reform Task Force on July 25. The purpose of the session was to hear stakeholders’ views on streamlining STB regulations. Hedrick presented recommendations to the task force on how to eliminate outdated or burdensome regulations. A number of shipper organizations were present, as were several railroads.
Earlier this week, the League joined with the American Chemistry Council and the Fertilizer Institute in submitting comments to the Surface Transportation Board (STB) in response to proposed STB rules to expedite rail rate cases. These proposed rules were announced to League members in the April 7 issue of our weekly e-newsletter, The Notice.
While the League generally supports the STB’s attempt to expedite rail rate cases and especially stand-alone cost (SAC) cases, we believe the proposed rules will have a minimal impact because they do not address the most significant cause of delay: the nature of the SAC standard itself. For that reason, NITL requests that the STB develop alternatives to the SAC standard that are not so inherently complex, costly, and time-consuming. We also encourage the STB to—
- offer proposals to expedite, if not standardize, the production of rail traffic data;
- address the problems caused by the use of propriety software; and
- prevent the evidentiary misalignment that has plagued all of the recent carload shipper SAC cases.
The proposed rules and comments on expediting rail rate cases are contained in STB Docket No. EP 733 (Ex Parte 733).
These filings are posted on the members section of the NITL.org and members may access those at any time by logging in here.
A group of nearly 100 organizations (including NITL) is opposing two proposals to levy taxes on cargo containers being processed through ports in Southern California.
In a letter to William Burke, the chairman of the South Coast Air Quality Management District in California, the organizations—representing manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors, and transportation and logistics providers—take issue with proposals to impose a tax of $35 per TEU (which would raise $385 million annually) and $100 per TEU (which would raise $1.1 billion each year).
“How these funds will be collected and what programs they would fund are ill defined, and any analysis on how such fees would impact local businesses and California’s ports as trade gateways is nonexistent,” the letter states. “The lack of analysis and lack of outreach to the trade community is troubling and discouraging. Past efforts have repeatedly failed due to the serious economic injury such a tax would cause California.”
Members of the National Industrial Transportation League (NITL) elected Mary Pileggi their new chairman on January 31 during the association’s annual business meeting.
Pileggi is sourcing and logistics manager for the fluoroproducts business of the Chemours Company, an independent, publicly held company formed in 2015 from the separation of the performance chemical businesses of DuPont. She manages global raw material purchasing and logistics interactions supporting the fluoropolymers and fluorochemical businesses of Chemours. She has more than 30 years of experience in logistics and previously worked for DuPont and for Consolidated Rail Corporation (Conrail).
Pileggi was elected chair of NITL at the association’s 2017 Transportation Summit in San Diego. The Summit brought together more than 150 leaders from highway, rail, and maritime freight transportation to discuss the challenges facing the transportation industry as well as issues around energy, the multi-generational workforce, and leadership.
In addition to Pileggi, NITL members elected the following professionals to the League’s Board of Directors:
- Randy Brown (First Vice Chairman), Cargill
- Thomas Jensen (Second Vice Chairman), UPS
- Bruce Ridley (Third Vice Chairman), Packaging Corporation of America
- Michael Regan (Treasurer), TranzAct Technologies
- Erik Bohn, OMYA, Inc.
- Gary Burns, LyondellBasel Industries
- Sandra Dearden, Highroad Consulting
- Matt Ehlinger, NCH Corporation
- Robert Kemp, DRT Transportation
- Richard Kloster, AllTranstek
- Doug Kratzberg, ExxonMobil Chemical
- Travis Krous, Nestle Purina Petcare
- Chip Lidicker, CF Industries Sales
- Todd Lindhorst, Jones-Hamilton Company
- Bill Lovick, Georgia-Pacific
- Meredith Neizer, Armada
- Thomas Pellington, David J. Joseph Company
- Don Pisano, Green Coffee Association
- Curt Warfel, AkzoNobel Sourcing
- Rick Webb, Watco Companies
The 2017 chairs of NITL’s modal committees are as follows:
- Highway Transportation Committee: Jeff Tucker, Tucker Company Worldwide
- Ocean Transportation Committee: Julie Alsup, International Paper
- Rail Transportation Committee: Frank De Castro, Solvay Chemicals
On January 13, the League joined with nine other trade groups in submitting reply comments to the Surface Transportation Board (STB) regarding the board’s proposed rule on competitive rail switching.
The 10 organizations, known collectively as the Shipper Coalition for Railroad Competition, represent thousands of companies that ship goods ranging from fertilizer to fruits and vegetables. In October 2016, the Shipper Coalition submitted opening comments in support of the STB’s proposed rule, which was published in July 2016. The Association of American Railroads (AAR) and individual Class I railroads, as well as the American Short Line and Regional Railroad Association (ASLRRA), also submitted opening comments, but in opposition to the STB’s proposed rule.
The Shipper Coalition’s reply comments responded to the opening comments submitted by the railroads and reiterated key points contained in the coalition’s opening comments.
“In these reply comments, the Shipper Coalition cuts sharply through the noise and obfuscation of the railroads’ comments and makes clear that change to the 1985 Switching Rule is badly needed, and that the board’s proposed switching rule is lawful, rational, justified, and workable,” the introduction to the reply comments states. “The Shipper Coalition also debunks the railroads’ exaggerated claims that the proposed rule will wreak havoc on the rail network and discourage investment, and summarily dispatches multiple inchoate attacks based on vagueness, environmental, labor, and constitutional grounds.”
An overview of the League’s activities pertaining to the STB’s competitive switching rule is here.
The Federal Maritime Commission (FMC) has now officially acknowledged the League’s petition to the agency aimed at combating unfair demurrage and detention charges. As previously announced, the League is leading a coalition of two dozen associations representing importers and exporters across a full spectrum of American industries. The coalition is challenging the common practice of shippers and truckers being charged high fees for late pickup or redelivery of containers when adverse port conditions prevent them from acting within allowable free time.
The FMC issued a “Notice of Filing and Request for Comments” on Petition No. P4-16 on December 20th and set a February 28, 2017 deadline for comments. League members are strongly encouraged to file comments with the FMC, and the League will provide guidance and assistance for members wishing to share their views with the agency.
This important initiative will be discussed in detail at the League’s Summit in San Diego, CA January 30-February 1, 2017. If you haven’t made plans to join us there, register now to ensure your seat at the table for updates on this initiative and many others.
The National Industrial Transportation League and a coalition representing retailers, manufacturers, truckers, transportation intermediaries and other business groups today asked the Federal Maritime Commission to set new policy preventing terminal operators and ocean carriers from charging unfair fees when uncontrollable incidents such as storms and strikes keep cargo from being picked up from ports on time.
“Recent events involving port congestion, labor strife, an ocean carrier bankruptcy, inclement weather and other disruption events have had crippling effects on U.S. ports and the stakeholders who rely on the efficient movement of goods,” the 25-member Coalition for Fair Port Practices said in a petition filed with the commission. During the incidents, storage and use charges have continued “even though shippers, consignees and drayage providers had no control over the events that caused the ports to be inaccessible and prevented them from retrieving their cargo or returning equipment.”
Cargo owners and trucking companies are normally given a certain number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that, they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the cargo containers and the trailers used to haul them, officially known as chassis, are not returned within a specified time.
That system was thrown into disarray this fall when the bankruptcy of South Korea’s Hanjin Shipping left cargo owners unable to pick up containers on time and later prevented them from returning containers and chassis. Delays have also occurred during other port disruptions cited in the petition, including the 2014-2015 labor slowdown at West Coast ports and Hurricane Sandy on the East Coast in 2012.
The coalition said millions of dollars in fees have been charged during such incidents:
- In one example cited, a retailer was charged $80,000 because it took up to nine days to retrieve containers when only four free days were allowed.
- A trucking company was charged $1.2 million after long lines at New York and New Jersey ports kept it from returning containers on time.
- A transportation company was charged $1.25 million after containers it tried to return were turned away at West Coast ports; the amount was eventually reduced to $250,000 but only a year after the company was forced to pay the fees upfront.
“Shippers, consignees and drayage providers do not create and cannot avoid these events,” the group said. “They cannot control the weather. They do not choose the terminals that carriers use. They are not parties to port labor collective bargaining agreements.”
The federal Shipping Act requires that the fees and related practices be “just and reasonable.” The petition asks the FMC to adopt a policy that would require free days to be extended during times of port congestion, weather-related events, port disruptions or delays caused by government actions or requirements beyond the control of the parties picking up or returning containers. Demurrage and similar fees charged during such incidents would be declared “unreasonable.” In some cases, “compensatory” fees could be charged provided that they did not exceed actual storage or equipment use costs. The proposed policy would apply to ocean carriers and marine terminal operators.
The National Industrial Transportation League welcomes the nomination of Elaine Chao to be the secretary of transportation in President-Elect Donald Trump’s administration. READ MORE